2014 Corporate Responsibility Report

Transcription

Growth Done Well
2014 Corporate Responsibility & Sustainability Report
1
Growth Done Well
That’s our goal. Business expansion continues to be the hallmark
of our strategy as we build upon our position as the world’s largest
flooring manufacturer. We’re committed to growing in ways that
are environmentally sound, socially responsible and that make
sense for our stakeholders.
Contents
CEO MESSAGE
2
COMPANY
4
APPROACH
11
PEOPLE
18
PRODUCT STEWARDSHIP
33
GOALS & PROGRESS
48
We are pleased to present Mohawk Industries’ sixth annual Corporate Responsibility & Sustainability
Report. We have prepared this report using the Global Reporting Initiative (GRI) 3.1 guidelines and
are reporting at a B+ application level. Much like our financial reporting process, Mohawk Industries
engages a third party to audit and verify the content of publicly issued reports. Accordingly, we
have commissioned FIRA to provide “Moderate Assurance” to the Web-based and PDF versions of
this report.
The reporting period for this year’s report is the 2014 calendar year, which is also our fiscal year.
Content is limited to the products and operations of Mohawk Industries and its wholly owned
subsidiaries. During the reporting period, we acquired a wood flooring plant in the Czech Republic.
Our process for defining the content of this report is closely aligned with our sustainability vision
and strategic approach that encompasses process, products and people. In evaluating content,
we sought to include data and metrics that were measurable, accurate and verifiable, primarily
through invoice records and systems data.
Mohawk Industries, Inc. | 2014 Corporate Responsibility & Sustainability Report
2
CEO Message
Mohawk has had no shortage of opportunities to hone the process
of growing responsibly as we have built the world’s largest flooring
company. During the past three decades, our operational footprint
has expanded from the U.S. to Australia, Brazil, Canada, Europe,
Malaysia, Mexico and Russia. Likewise, our product portfolio has
expanded from our flagship Mohawk carpet brand to encompass
leading brands and market positions in ceramic, laminate and wood.
These expansions have been accomplished through the acquisition
and integration of more than 30 new businesses, as well as ongoing
investments in legacy businesses. From 2013 through the first half of
2015, we’ve committed nearly $3 billion to acquisitions and another
$1 billion plus to investment in existing businesses. When we’re
making investments of that magnitude, we must get them right and
we do so by adhering to a set of internal guidelines that continue to
serve us well.
Reinvestment is key to making strong businesses even stronger.
We view our investment in an acquisition as a start rather than a
finish. We understand that continual cycles of reinvestment are
required to sustain a business long term. Capital investments in
state-of-the-art manufacturing equipment, for example, can help
us conserve natural resources for our planet, create a safer working
environment for our employees and enhance product quality for our
customers — all of which contribute to higher levels of profitability
that drive more reinvestment.
A Message from
Jeffrey Lorberbaum,
CEO and Chairman
In Mohawk’s pursuit of growth and profitability, we never lose
sight of who we are as a Company. Our challenge is to balance the
growth of our business and global footprint with our sense of
responsibility as an organization. It’s the right thing to do; and
we have seen time and again that when growth is done well, it
creates opportunities for our business and all of our stakeholders.
More environmentally sound manufacturing practices lead us to
higher levels of efficiency and profitability. Investment in R&D to
innovate more sustainable products results in differentiated products
that command a higher premium in the marketplace. Being a good
and fair employer positions us to attract, retain and develop the best
and the brightest talent. And, helping to build strong communities
means we have good places to both live and do business. Simply
put, growth done well makes good business sense.
A global company is best run by local businesses.
Though flooring is a common denominator across all of our businesses, there are very different dynamics within each unit, ranging
from geographic markets to product categories to distribution
channels. These differences are driven by factors such as regulatory requirements, employment practices and supply chains, to
name a few, that also are unique to each business. As we grow
around the world, our decentralized management approach places
operational responsibility with the team closest to the ground in
order to drive optimal transparency, accountability and performance.
Best practices should be leveraged in a flexible manner.
Sharing good ideas and best practices across Mohawk business
units, geographies and brands can create significant returns while
also complementing our decentralized management approach.
Take our zero landfill waste program. What started as a pilot initiative
in our rug and mat business was then leveraged throughout our
entire Carpet business. Now, the program has been successfully
implemented at 25 sites. Equally beneficial is the mindset that we’re
instilling among our manufacturing employees who are more
mindful of their material use both at work and at home.
3
CEO Message
Inherent to the success of what will eventually be a global program
is the flexibility for each site to adapt waste diversion processes to
their particular plant. That flexibility helps to ensure that when
one business unit passes a best practice to another, that practice is
embraced and perhaps even enhanced in the process of adapting
it to new needs. This holds true across every area of the business –
logistics, technology, safety, product development and sales, to
name a few.
Another way to share best practices is through hands-on experiences. As
our global organization grows, we are finding great value in providing
rotational opportunities for employees among our business units. For
example, our Malaysian hardwood manufacturing plant reports in to
Unilin, which is based in Europe. Having an individual from the plant
on a short-term assignment in Europe provides cross-development
opportunities for both our employee and our business.
The efficacy of our approach to growth was evident in 2014 as Mohawk
recorded another strong year. Sales climbed 6 percent to $7.8 billion,
while adjusted net earnings climbed 26 percent to $598 million.
Beyond our financial performance, we grew well on numerous other
fronts by:
• Integrating three businesses acquired in 2013.
• Acquiring a wood flooring plant in the Czech Republic to support
expansion of our wood business in Europe and Russia.
• Introducing new products in two of our most successful carpet lines,
EverStrand®, which contains up to 100 percent recycled content and
utilizes our proprietary Continuum manufacturing process, and
SmartStrand®, made with a renewably sourced polymer.
• Investing in our Ceramic business through a new production line
in Dallas, a new plant in Tennessee and the modernization of our
European manufacturing facilities.
• Recording double-digit percentage improvements across all of our
corporate safety metrics, including Recordable Events and Lost and
Restricted Workday incidents.
•A
chieving the highest ranking for a manufacturing company —
number 14 — on Training magazine’s annual Top 125 list, our tenth
consecutive year of making this list.
•R
educing our overall absolute energy use for the first time and
energy intensity for the fifth consecutive year.
Further, we began 2015 by announcing our intent to acquire the
IVC Group, the fastest-growing supplier of luxury vinyl tile (LVT) in
Europe. This acquisition, combined with the construction of a new
LVT plant in the U.S., firmly establishes Mohawk as a leader in one
of the fastest growing categories in flooring today. Also, in early
2015, we acquired a small Eastern European ceramic manufacturer,
a great example of our practice of manufacturing products in the
markets where we sell them in order to reduce our logistics and
transportation impact.
Strong businesses are sustainable ones, and we are confident in
Mohawk’s long-term capabilities and potential. Through continuous
business reinvestment, a highly defined business strategy and a
well-developed sense of responsibility, we look forward to building
on our track record of Growth Done Well for the benefit of all
our stakeholders.
Thank you for your continued interest in and support of our Company.
Sincerely,
Jeffrey Lorberbaum
Chairman and Chief Executive Officer
4
MOHAWK
Company
COMPANY
|
5
Overview
Mohawk Today
31,000+
Employees
HEADQUARTERS
Calhoun, Georgia
$7.8B
100+
Annual
Sales
LEADING
MARKET POSITIONS
•U
.S. — Carpet, Ceramic Tile,
Natural Stone, Wood, Rugs
• Europe — Ceramic Tile, Laminate
• Russia — Ceramic Tile, Laminate
Year Manufacturing Legacy
END-CUSTOMERS
SALES CHANNELS
• Consumers
• Commercial Builders
& Contractors
• Specialty Retail
• Home Improvement Retailers
• Department Stores
• Distributors
VERTICALLY INTEGRATED OPERATIONS LEAD TO PRODUCTS WITH BETTER PERFORMANCE,
MORE SUSTAINABLE FEATURES AND EASIER CARE
Design
Material Sourcing
Manufacturing
Distribution
End-to-end integration also delivers business advantages such as quality control, cost management and raw material integrity.
BUSINESS UNITS
Carpet
One of the largest carpet suppliers
in the world.
Products:
Carpet cushion, rugs and mats,
floor care products
Brands:
Mohawk®, Karastan®, Lees®,
Bigelow®, Durkan® and
Mohawk Home®
Learn more:
Residential:
www.mohawkflooring.com
Ceramic
The largest manufacturer, distributor
and marketer of ceramic tile and
natural stone in the world.
Brands:
Daltile®, American Olean® ,
Marazzi® and Ragno
Learn more:
www.daltile.com
www.americanolean.com
www.marazziusa.com
www.ragnousa.com
www.marazzigroup.com
Commercial:
www.mohawkgroup.com
Rugs:
www.mohawkhome.com
Laminate & Wood
One of the world’s largest suppliers
of premium laminate and hardwood
flooring.
Europe product line includes roofing
systems, insulation boards and other
wood products for the construction,
cabinet and furniture markets.
Brands:
Quick-Step®, Columbia®, Century®,
didit™ Click Furniture and Pergo®
Learn more:
www.unilin.com
www.quickstep.com
www.pergo .com
COMPANY
|
6
25 Years of Growth Done Well
1990s
2002
United States
Built U.S. carpet and rug positions with
a series of acquisitions throughout the
decade. Today, we are a leader in the $19
billion U.S. flooring market with product
distribution across multiple categories.
Mexico
Became largest U.S. ceramic manufacturer
with acquisition of Dal-Tile, with facilities in
the U.S. and Mexico.
2007
2011
Malaysia
Achieved vertical integration in wood
category through Columbia Wood
Flooring acquisition and realigned
Malaysian hardwood manufacturing
operations to drive efficiencies and
productivity.
Russia and Australia
Entered the Australian flooring market
through the acquisition of the only national laminate and hardwood distributor and
began production of laminate in Russia to
maximize market share.
2013
Scandinavia, Italy, Spain
Established worldwide leadership in ceramic category through
Marazzi acquisition; created leading laminate position in U.S. and
enhanced European premium laminate position by acquiring Pergo;
consolidated regional chipboard leadership with Spano acquisition.
2004
Europe
Established leading positions in U.S. and
European laminate markets by acquiring
Unilin and its patented Uniclic® installation
technology, as well as a regional European
roofing panel and board business.
2012
Brazil
Entered the Brazilian laminate flooring
market through a JV investment.
2014
Czech Republic
Acquired a wood flooring plant in the Czech Republic to grow
wood business across Europe and Russia.
COMPANY
|
7
Economic Impact
A comprehensive financial review of our business can be found in our 2014 10-K filing with the Securities and Exchange Commission. Since the publication
of our 2013 Sustainability Report, we have closed three sites in the U.S. and one plant in Europe and sold one facility in both Italy and France, respectively.
Net Sales
Adjusted Net Earnings(1)
(in millions)
Adjusted Diluted Earnings
Per Share(1)
2013
2013
2013
2014
2014
2014
Adjusted Operating Income(1)
Total Assets
Capital Expenditures
2013
2013
2013
2014
2014
2014
Sales by Geography
Sales by Business Segment(2)
Sales by End Use
70%
40%
80%
North America
Carpet
Residential
20%
40%
20%
Western Europe
Ceramic
Commercial
5%
20%
Russia
Laminate & Wood
(in billions)
$7.35
$7.80
(in millions)
$689.9
$834.4
$473.4
$597.7
(in billions)
$8.5
$8.3
$6.55
$8.15
(in millions)
$367
$562
5%
Rest of World
Reconciliations to the most comparable GAAP measures can be found at www.mohawkind.com and in Appendix A to the 2015 Proxy Statement.
Rounded without acquisitions.
(1) (2) Mohawk Industries, Inc. | 2014 Corporate Responsibility & Sustainability Report
COMPANY
|
Board of Directors & Senior Management
8
Board of Directors
Jeffrey S. Lorberbaum
Chairman and Chief Executive Officer
Age 60*
Karen A. Smith Bogart (2)(3)
President of Smith Bogart Consulting
Age 57*
Bruce C. Bruckmann (1)(3)
Managing Director of Bruckmann, Rosser,
Sherrill & Co., Inc.
Age 61*
Frans G. De Cock
Former President of Unilin
Age 72*
John F. Fiedler (2)
Former Chairman and Chief Executive Officer
of Borg-Warner Automotive, Inc.
Age 76*
Richard C. III (1)(3)
Chairman of Triumph Group, Inc.
Age 71*
Joseph A. Onorato
Former Senior Vice President and
Chief Financial Officer of Echlin, Inc.
Age 66*
(1)(2)
William H. Runge III (2)
Managing Director of Alvarez & Marsal
Age 63*
W. Christopher Wellborn
President and Chief Operating Officer
Age 59*
(1) Audit Committee
(2) Compensation Committee
(3) Nominating and Corporate Governance Committee
*as of December 31, 2014
Senior Management Team
Jeffrey S. Lorberbaum
Chairman and
Chief E xecutive Officer
W. Christopher Wellborn
President and Chief Operating Officer
Frank H. Boykin
Chief Financial Officer
James F. Brunk
Corporate Controller and
Chief Accounting Officer
John C. Turner, Jr.
President, Ceramic North America
Phil Brown
Senior Vice President of Human Resources
Brian M. Carson
President, Carpet
Jana Kanyadan
Chief Information Officer
Bernard P. Thiers
President, Laminate & Wood
R. David Patton
Vice President — Business Strategy, General
Counsel and Chief Sustainability Officer
COMPANY
|
9
Governance & Ethics
Governance
Ethics
Mohawk Industries is a publicly traded company listed on the
New York Stock Exchange under the ticker symbol “MHK.” We
make the following materials available to the public on our website at www.mohawkind.com:
• Board of Directors and Executive Officer listing
• Board committee charters
• Contact information for Board members
• Corporate governance guidelines
• Privacy policy
• Related person transaction policy
• Standards of conduct and business ethics
Honesty, integrity and transparency are critical to sustaining any
organization. All of our employees, officers and directors are expected to adhere to our Code of Conduct, which demands integrity and
a high standard of ethics. We continue to re-examine our ethics
policies and procedures to ensure that we are managing the demands
of global expansion.
In addition, our 10-K and Proxy filings with the Securities and
Exchange Commission are accessible through the Investor
Information section of the corporate website.
Executive Compensation
Senior management and executives are compensated for
performance on key indicators that include social and environmental metrics. Our Board of Directors is not compensated on
these performance indicators. The Board appraises its own performance through self-assessment and committee evaluation.
More information about executive and board compensation is
available in our 2015 Proxy filing.
Risk Management
We identify and address risks and opportunities faced by our
business through a multi-tiered approach. Our Board of Directors
and its committees assess risk and oversee risk-mitigation on an
enterprise-wide basis across a variety of functional areas. Corporate
administrative and business leaders in each of our segments
support these efforts. Our finance personnel assess risk in areas
such as treasury, insurance, public reporting and audit, while our
legal department personnel evaluate and advise on legal risk
mitigation. Operating units are responsible for risk management
within their respective businesses, with oversight from our corporate
administrative and executive teams.
Unethical behavior, including any type of corruption, is not
tolerated within the organization. We also have policies in place
throughout our global operations to deter anti-competitive behavior.
As our Standards of Conduct and Ethics state succinctly, “Mohawk is
committed to doing what is right and deterring wrongdoing.”
Currently, all of our business units are analyzed for corruption
risks, and our audit team regularly reviews accounting records
for evidence of corruption. We have determined that most salaried or white collar employees and agents of the corporation are
at risk for encountering circumstances that require sound ethical judgment. This group represents roughly 27 percent of our
global workforce. Corruption training is done at least once every
two years across the company. In 2014, 49 percent of our at-risk
employees were trained in our anti-corruption policies and procedures. These employees are trained, based on the nature of their job
responsibilities, to understand the potential for corruption to occur. In
addition, these individuals complete an ethics/corruption survey as
part of their annual review. Also in 2014, we enhanced our training
procedures by introducing Web-based anti-corruption training delivered in the local languages of salaried employees worldwide in order
to help them better understand corruption policies and procedures.
Mohawk Industries does not receive any significant financial
assistance from local, state or federal government entities. We do
not lobby directly on behalf of our own business operations, nor
does the Company make financial contributions to political candidates. On occasion, Mohawk does participate in industry lobbying
and public policy development efforts. Mohawk employees may
make individual contributions to political candidates.
COMPANY
|
10
Supply Chain
We expect our commitments to operational excellence, ethical conduct
and respect for individual rights to be shared by all of our suppliers.
To this end, we maintain a Supplier Code of Conduct to ensure that
materials incorporated into Mohawk products comply with laws and
requirements, including our own principles of social responsibility.
The Code, which we have enhanced as we have expanded globally,
clearly outlines our expectations, consistent with International Labour
Organization standards, with regard to the prohibition of child labor,
forced compulsory labor, the maintenance of workplaces free of coercion and harassment, the responsibility to provide employees with a
safe and healthy workplace, and respect for the rights of employees to
organize and bargain collectively. The Code also communicates that
suppliers are expected to meet requirements applicable to human
trafficking and slavery that are in accordance with the California
Transparency in Supply Chains Act of 2010 (SB 657).
Adherence to applicable laws, regulations and standards is a condition
for doing business with Mohawk, and compliance extends to suppliers’
subcontractors. The Mohawk Supplier Code of Conduct is implemented for Mohawk worldwide. We conduct assessments of select
new and existing suppliers to verify compliance with the Code. These
include supplier questionnaires, management meetings and facility
audits, which may be attended by Mohawk staff or third parties. We
do not currently retain a third-party verifier, but reserve the right to
retain one, and require suppliers to agree to third-party verification.
We provide training to employees and management who are responsible for the implementation, management and enforcement of our
Supplier Code of Conduct. Should we discover a Code violation, we
promptly address the issue with the supplier and require correction of
the issue. Our internal accountability controls include unannounced
audits to verify correction and compliance, and the potential for termination of the supplier relationship for failure to remedy the violation.
Conflict Minerals
Mohawk recognizes conflict minerals as an important supply chain
issue. We have developed a strong position on our use of all minerals,
along with a materials verification process that is applied to our global
suppliers. These minerals constitute a very small part of our supply
chain needs. To the extent that these minerals are used in our products, however, we have confirmed with our suppliers that none of
these have been sourced from the Democratic Republic of Congo
or an adjoining country. We will continue to monitor our use of
these minerals to ensure, as accurately as possible, that they do
not originate from this region.
MOHAWK
Approach
11
APPROACH
|
12
Sustainability Strategy
APPROACH
| Strategy
Sound environmental, social and governance principles are
intrinsic to the culture and operations of Mohawk Industries. As a
publicly held company with a strong code of conduct, we understand the importance of compliance across every aspect of our
operations. Even more important, as stewards of a business that
must compete in the marketplace on a daily basis, we appreciate
the value and goodwill that comes with being an organization
that always strives to do what is right for our stakeholders.
Moreover, we continue to see the growing importance that many
of our customers place on sustainable products and are committed
to meeting their needs.
These factors come together in a three-pronged sustainability
strategy that combines process, products and people:
PROCESS
Minimizing the environmental impact of our manufacturing and
distribution operations through resource conservation and waste
reduction.
PRODUCTS
Offering products across every flooring category that utilize either
recycled or renewable inputs, as well as holding suppliers accountable
for ensuring that products are manufactured in a responsible manner —
one that respects both the labor and the environment behind them.
PEOPLE
Affirming a belief that every aspect of our business benefits when we
engage positively with people who are stakeholders in our success. Our
intent is always to be a fair employer, an ethical business partner and
an active corporate citizen in our communities.
Sustainable Innovation
Innovation is a key business strategy for Mohawk and one that
transcends all aspects of our sustainability strategy as well. We
nurture innovation not only by investing in R&D activity, but also
by fostering a culture where fresh thinking is rewarded and a
healthy dissatisfaction with the status quo is encouraged. The
result almost always leads to better and more differentiated
products in the marketplace, as well as improved ways to operate
our business.
In the product arena, innovation has led to such breakthroughs
across all categories. For example, Continuum™ technology supports
the growth of product collections made from up to 100 percent
recycled polyester. Dal-Tile’s state-of-the-art Reveal Imaging®
technology reduces the margin for error in design and manufacturing, which in turn enhances material efficiency. In laminate and
wood products, Unilin’s patented Uniclic® installation technology, a glue-less and chemical free system, reduces material use
and air quality impact during product installation.
We also incorporate innovation into our approach to business
processes. In recent years, for example, innovative dyeing technologies in our commercial carpet business have enabled us to meaningfully reduce the water intensity of that manufacturing phase.
Innovation can even extend to how we manage our workforce. When
we learned that 40 percent of our Carpet business employees did
not have a primary-care physician, we took a fresh approach and
established Healthy Life Centers on-site at our plants to provide
wellness programs and help our employees manage chronic conditions. These initiatives are among countless examples of how
innovative thinking permeates our business to further our sustainability objectives.
13
APPROACH
| Sustainability
Strategy
Strategy
Global Scale
We evaluate our sustainability strategy on a continual basis. Two
important criteria are how well the strategy performs through
industry cycles and how well it can be exported around the world.
In both cases, we have found our strategy to be both adaptable
and flexible. Not only did the strategy serve us well through one
of the worst industry downturns in history, but it also has been an
effective part of an aggressive level of business expansion since
2010. This expansion has taken us into new geographic markets
and product categories, and strengthened our manufacturing
footprint.
Today, we have operations on five continents and sell products in
more than 140 countries around the world. Within each market
where we operate, there is significant variance among customer
needs, labor practices and environmental compliance. By leveraging the systems and standards that we have honed in our legacy
North American businesses and combining them with a flexible
approach that can adapt to the unique needs of each local market,
we are confident that this strategy will continue to ensure that
our growth is accompanied by a commitment to sustainable
operating principles.
Sustainability Governance
The responsibility for ensuring the execution of our sustainability
strategy involves management interaction at the highest levels of
our Company. This starts at the board level, where the Nominating
and Corporate Governance Committee maintains direct oversight
of sustainability. At the operational level, our Sustainability Council
coordinates the implementation of sustainability strategy. The
Council is comprised of the President of Mohawk Industries, who
also is a Company Director, the Presidents of our three business
segments, our Chief Sustainability Officer and our Vice President of
Corporate Sustainability. The Board of Directors receives updates
from members of this Council on a regular basis.
APPROACH
|
14
Q&A
APPROACH
| Strategy
A Conversation with
Dave Patton,
Chief Sustainability Officer
During the past year, you’ve
added Chief Sustainability Officer
to your responsibilities, which
also include serving as General
Counsel and Vice President of
Business Strategy. How do these
positions complement one
another?
My CSO responsibilities could be seen as an extension of my legal and business development
roles. For instance, the sustainable practices of potential acquisitions are always in focus from the
moment we begin considering those transactions. The CSO title formalizes those responsibilities and gives me expanded insight into many of the practices across the enterprise that contribute to our industry leadership in sustainability. That knowledge provides an additional
perspective for my legal and business development roles and helps me find better solutions
for the Company. Essentially, all of the positions have the same ultimate goal: operating the business in a way that maximizes results for our stakeholders. That could include identifying
instances where we can leverage an acquisition to enter a new market with multiple products,
or it could mean introducing our sustainability initiatives to a new business to reduce their
environmental impact and improve their margins. Regardless of the title, my focus is firmly
on adding value to the business, which has been the driving force behind many of our
sustainable initiatives.
Formally establishing responsibility
for sustainability at the Board committee level has been another change
in the past year. How is that helping
further sustainability efforts?
It reinforces the commitment we’ve always had to sustainability by ensuring accountability
at the highest levels of our Company. It focuses our energies and allows us to tap, in a more
formal and systematic way, the sustainability experience and ideas of our Board.
You’ve taken on the CSO role at a
time of rapid business expansion
for Mohawk. How is this growth
shaping your agenda from a
sustainability perspective?
Mohawk is a very strong company operationally, so there are practices in our legacy businesses
that we can leverage in newer businesses. For example, our initiatives and processes to reduce
waste are easily exported to all areas of the business, with modifications to address specific
waste streams where they differ. Because we have such breadth and diversity in our product
portfolio and geographies, there are constantly new opportunities to extend a good process
developed in one area to the entire enterprise. Plus, sharing best practices is a tremendous
strength as we integrate our acquisitions, so putting resources and attention into those avenues
of communication is really working for us.
15
APPROACH
| Q&A
Strategy
How difficult is it to share best
practices across different geographic
markets and product categories?
We’ve made it a priority because we recognize the value to our business. The products,
manufacturing processes, markets and local regulations may be different, such as carpet
versus ceramic, but many of the practices and thinking are the same. When you identify a
process that delivers results in one product category, implementing the process in other
categories is relatively easy because the results are proven and it isn’t necessary to start
from scratch. It can be even more straightforward when we’re looking to share best
practices across geographic markets. For example, in our Ceramic business, the process
to recycle 100 percent of wastewater in North America is easily transferable to our European
ceramic operations. In these cases, we have a head start that makes it easier.
Culture plays a significant role
in building a more sustainable
business. What is your approach
to integrating the culture of an
acquired business?
Mohawk began as a local business and has maintained a very grassroots approach as the
business has grown over several decades. As a rule, we’re not top-down managers who
dictate a single way things must be done, but rather our philosophy is to work with
management to set goals, share ideas that have worked in other parts of our business,
and then place our trust and confidence in successful management teams that know their
businesses. We avoid a “one size fits all” mentality in favor of business solutions that are
in sync with their local markets.
How does this philosophy factor
into risk management and what
issues are top-of-mind from a
risk perspective?
For the most part, human rights and other employment-related practices are not an issue
for us in the markets where we participate. But with an expanding global footprint, you
don’t automatically assume areas that were non-issues in the past will remain non-issues
in the future. Parts of our business involve water-intensive processes. Many of our products
have petroleum-based inputs. All of this impacts how we think about climate change and
other long-term issues.
Moving to your product strategy,
what trends are you seeing?
Customers, especially on the commercial side, are asking for more information on our
sustainable practices. They want transparency into product source materials and product
manufacturing. For commercial, government and big-box retail customers, in particular,
labeling is increasingly important. There is a heightened awareness of the need for supply
chain management, and we’re part of that chain. For these customers, sustainability is part
of the price of admission and we need to be responsive to that. An increasing focus on
sustainability is good for our customers and their customers, and that is ultimately a
great thing for our business.
APPROACH
|
16
Stakeholder Engagement
APPROACH
| Strategy
Stakeholders play an important role in the ongoing evolution and
execution of our sustainability strategy. We plan to conduct another
stakeholder engagement exercise in the next 12 months as we
prepare to transition to the new Global Reporting Initiative (GRI) 4.0
guidelines. This exercise will be similar to the one that we conducted
when we began to formalize our corporate sustainability function
approximately five years ago.
At that time, the goal was to identify our primary stakeholders and
ascertain their most important concerns. A mapping exercise studied
15 different groups of stakeholders to narrow down a primary group
that possessed both a high level of interest in Mohawk’s sustainability
program and a meaningful impact on our business.
This group included:
EXTERNAL
INTERNAL
• Shareholders
• Primary Customers
• Product Advocacy NGOs
• Suppliers
• Functional Leaders
• Employees
The following table summarizes the issues raised by this primary
group of stakeholders and our actions to address these issues to date:
Issue Area
Action to Date
Products that support healthy indoor environments, particularly as relates to air
quality and VOC emissions.
• Increased certifications, such as FloorScore®, for strict indoor air quality standards
across the majority of our U.S. laminate and wood portfolio.
• Continue to explore alternative methods for minimizing VOCs in other products.
An expectation that Mohawk will understand the full impact of its products, especially
as relates to product inputs, such as recycled and/or renewable content, and how our
products can lead to sustainable solutions to meet flooring needs.
• Environmental Product Declaration (EPD) programs have been implemented
for all North American ceramic products, as well as laminate and wood products
in Europe.
• In addition, our commercial carpet includes ILFI Declare® labeling .
• All businesses have ongoing life cycle assessment (LCA) projects with the intent to
develop EPDs across all product categories in the future.
A desire for Mohawk to engage its supply chain to encourage responsible raw material
sourcing and sustainable manufacturing processes.
• Enhanced Supplier Code of Conduct, as business has expanded globally.
• Developed new supplier assessment and audit process.
• Established strong materials verification process in order to fully comply with
conflict minerals legislation.
An ability to provide products manufactured in local markets, especially to meet
LEED standards.
• Invested more than $2 billion in acquisitions and joint ventures over the past
several years to greatly extend our global manufacturing capabilities and product
distribution footprint.
Since we conducted our stakeholder workshop, dialogue with stakeholders has continued on a regular — in some cases daily — basis.
Stakeholder Group
Primary Communication Channels
Primary Customers
Dedicated sales force by category and distribution channel; product literature; training programs; “voice of the customer” surveys;
social media
Shareholders
Quarterly SEC filings; quarterly earnings conference calls with senior management; one-on-one meetings; annual meeting;
annual report
Employees
Intranet system; social media; “cascading” management briefings
Product Advocacy NGOs
Targeted outreach product literature; social media; consumer and trade industry affiliations
Beyond these constituencies, our stakeholders are people, groups, organizations or systems that affect or can be affected by our Company.
This includes communities, suppliers, governments, the media, non-governmental organizations (NGOs) and reporting agencies. As our
sustainability strategy continues to evolve, we communicate regularly with these groups to listen and further understand their needs and
expectations. This feedback, in turn, helps us to develop our own strategies, policies and processes.
APPROACH
|
17
Awards
APPROACH
| Strategy
Corporate
• Newsweek 2014 Top 500 U.S. Large “Green” Companies —
Mohawk Industries
• S outheastern Corporate Sustainability Rankings Most
Sustainable Flooring Manufacturer — Mohawk Industries
• 2 014 Fortune 500 — Mohawk Industries
Operations
• Liberty Mutual Insurance Safety Commendation Awards —
all Mohawk Southeast Regional Distribution Centers
• Liberty Mutual Insurance Residual Risk Reduction (R3) Award —
Unilin Holden facility
• Liberty Mutual Insurance Gold Award for Outstanding Safety
Performance in 2013 — Unilin Holden facility
• N
orth Carolina Commission of Labor One Million Man Hours
Without Lost Time Award — Thomasville, Georgia, facility
• S herwin-Williams 2014 Vendor of the Year
• W
almart 2014 Vendor of the Year — Mohawk Home
• U
nion Pacific Railroad Drivers Safety Recognition Award —
Mohawk Logistics Drivers Belinda Pipkins and Danny Walker
• I SO9001:2008 Certification — Unilin Melbourne
Product
• International Surface Event Best of SURFACES 2015 —
SmartStrand® Forever Clean™
• Interior Design Magazine Awards
• Cross-Market Versatility Winner — Hot & Heavy LVT
• Use of Color Winner — WHY LVT, designed in collaboration
with Mac Stopa of Massive Design
• Design Solution Underfoot Honoree — New Vintage
Modular Carpet
• BUILDINGS Product Innovations Grand Prize —
Hot & Heavy LVT
• C ontract Magazine Best of NeoCon® Editors’ Pick Award —
Breaking Form Collection
• N
orth American Laminate Flooring Association (NALFA)
Company of the Year — Quick-Step
• F loor Covering News Laminate Manufacturer of the Year — Quick-Step
• G
old Medal - Chantiers de l’Innovation de l’année 2015 of the
Union des Maisons Françaises (UMF), in the category équipements the second-work - ISOCOMBO insulation panels
• F looring Trader of the Year, Timber Trade Journal Awards
(London) — Quick-Step
Affiliations
Mohawk participates in and is affiliated with numerous industry trade organizations.
• American Institute of Architects
• American Society of Interior Designers
• American Society of Landscape Architects
• Assisted Living Federation of America
• Association of Luxury Suite Directors
• Association of Pool & Spa Professionals
• Association of Postconsumer Plastic Recyclers
• Bureau of Normalization
• Carpet America Recovery Effort
• Carpet and Rug Institute
• Ceramic Tile Institute of America
• Council of Educational Facility Planners International
• European Producers of Laminate Flooring
• Fedustria (Federation of the Textile, Wood and
Furniture Industries)
• Forest Stewardship Council
• Green Building Certification Institute
• Institut Bauen und Umwelt (Institute for Construction
and Environment)
• International Facility Management Association
• International Interior Design Association
• I nternational Masonry Institute
• M
anufactured Housing Institute
• M
arble Institute of America
• M
arketing Leadership Council
• M
ason Contractors Association of America
• N
ational Association for PET Container Resources
• N
ational Association of Floor Covering Distributors
• N
ational Association of the Remodeling Industry
• N
ational Council of the Housing Industry
• N
ational Kitchen & Bath Association
• N
ational Spa & Pool Institute
• N
ational Wood Flooring Association
• N
orth American Laminate Flooring Association
• P
rogramme for the Endorsement of Forest Certification Schemes
• S outheast Recycling Development Council
• T echnisch Centrum van der Houtnijverheid (Technical Center
of Wood Technology)
• T ile Council of North America
• U
.S. Green Building Council
• W
orld Floor Covering Association
18
MOHAWK
People
PEOPLE
|
19
Workforce Profile
PEOPLE
| Workforce Profile
We realize the value of having a workforce that reflects the
diverse marketplaces we serve and the global nature of our
operations. Hence, we foster a culture of acceptance and fairness.
We view diversity and inclusion as more than demographic
metrics. Our workforce encompasses a multitude of viewpoints,
skills, strengths and life experiences. Each person brings to our
organization unique attributes that make us stronger collectively.
2014 Total Workforce by Region
To this end, we are an equal opportunity employer that does not
discriminate on the basis of race, religion, gender, national origin, age,
marital status, sexual orientation or disability. Non-discriminatory
policies and practices are in place to ensure that our equal opportunity
approach is enforced. We will consider any individual for any
position for which he or she is qualified and can perform the essential
job functions. In the United States, we actively recruit women and
minorities through targeted outreach efforts. In 2014, our workforce
was composed of 30 percent females. In addition, 1 percent of
our employees are classified as part-time.
2014 Total Workforce by Age Group
66+
Asia
18-30
Mexico
United States
47-65
Europe/Russia
31-46
United States: 19,012
Europe/Russia: 8,200
Mexico: 3,567
Asia: 995
Ages 18-30: 6,847
Ages 31-46: 13,473
Total Workforce 2013 vs. 2014
32,117
2013
31,774
2014
Ages 47-65: 11,083
Ages 66+: 371
20
PEOPLE
| Workforce
WorkforceProfile
Profile
2014 Employee Turnover
2014 New Hires
By Gender
By Gender
Female
2,037
Female
1,999
6.29%
Male
5,336
Male
4,992
15.71%
By Age Group
By Age Group
18-30
4,063
18-30
3,161
9.95%
31-46
2,433
31-46
2,349
7.39%
47-65
862
47-65
1,369
4.31%
111
0.35%
66+
15
66+
By Region
By Region
United States
4,102
United States
3,915
12.32%
Mexico
1,040
Mexico
1,073
3.38%
Europe/Russia
1,727
Europe/Russia
1,524
4.80%
479
1.51%
Voluntary
4,830
15.20%
Involuntary
1,941
6.11%
Asia
504
Asia
By Type
PEOPLE
|
21
Safety
PEOPLE
| Workforce Profile
Safety doesn’t happen by accident. Through safety-leadership
programs, employee engagement and well-defined processes
and procedures, we are working to improve safety at all of our
facilities every day. Our commitment to continuous safety
improvement is founded on our culture of prevention, where
everyone takes responsibility for safety and works toward our
goal of zero injuries or illnesses.
Mohawk’s safety initiatives are led by an Executive Safety
Leadership Team that:
• Is accountable for safety leadership.
• Provides a common corporate structure and metrics.
• Shares ideas and information across business units.
• Acts globally while allowing flexibility for each local
operation to implement rapid, cost-effective safety solutions.
In addition, formal joint management-worker safety and health
committees represent more than 70 percent of our employees.
Lost Time and Recordable Incident Rates
2.5
2.27
2.47
1.87
2.05
0.63
0.58
0.67
2009
2010
2011
2.0
1.99
2.31
2.00
1.5
1.0
0.5
0
0.42
2008
● Recordable Incident Rate
0.46
2012
0.72
0.65
2013
2014
● Lost Time Incident Rate
Mohawk utilizes the U.S. standard for incident case clarification as specified in 29 CFR 1904 in
order to maintain a consistent and viable means of case classification on a global basis.
New Initiatives and Accomplishments
The past year was the first in which we had 100 percent participation
across all businesses in our Corporate Safety Scorecard, which
tracks both leading and lagging indicators to support our
emphasis on proactively reducing risks. As a result, we are able to
realize ongoing reductions in overall injuries and the associated
costs, both personal and business, associated with them.
Training plays a significant role in these efforts. In 2014, 215
supervisors and managers successfully completed the 10-hour
Occupational Safety Training Course for general industry, which
includes topics such as protective equipment and machine
guarding. Also during the year, 59 participants were certified
in the Mohawk Master Safety Trainer program, enabling us to
use our own employees to deliver Mohawk safety training to
co-workers. Similarly, we added 21 American Red Cross-certified
training instructors to our ranks in 2014. These instructors are
certified to provide training to personnel in our facilities.
The effectiveness of our strategy to leverage internal resources
is also seen in an internally developed version of Occupational
Health and Safety Assessment Specification (OHSAS) 18001
certification. This internal certification audits to the same criteria
as externally developed certification. During the year, five Dal-Tile
regional distribution centers and one manufacturing plant were
among the first sites to receive the internal certification. Three
additional sites passed external OHSAS 18001 certification.
In addition to training, best practice sharing is key to encouraging
continuous improvement of processes that result in ever-better
safety outcomes. Such is the case at Dal-Tile, which saw its best
year on record for safety performance in 2014. During the year,
approximately 85 leaders from within Safety and Human Resources,
as well as plant and regional distribution center management,
gathered for a three-day conference to learn from each other. Success
stories included the Sunnyvale, Texas, and Florence, Alabama, facilities, which initiated extensive safety improvements and increased
team member training. As a result, both facilities improved their
total case incident rate by 60 percent last year. Also, in Florence, the
facility congratulated approximately 140 team members as the first
graduating class of Dal-Tile’s new “Safety College.” The 10-week training
course covers a wide range of safety-specific topics to further educate
team members about potential hazards on the work site and measures
they can take to prevent accidents.
In recognition of all of these and other efforts, Liberty Mutual
presented 110 awards for safety performance at individual sites in 2014.
Sites must achieve a DART rate of 50 percent or better than the industry average to earn a Safety Commendation Award; 60 percent or
better for a Silver Award; and 80 percent or better for a Gold Award.
In addition, the Georgia Association of Manufacturers recognized
33 Mohawk facilities in Georgia for zero lost time accidents in 2014.
22
PEOPLE
| Safety
Workforce Profile
Employee Engagement
At Mohawk, we strive to promote a culture of safety not only through
training and practice, but also through employee engagement.
During Safety Week 2014 at our facility in Thomasville, North
Carolina, for example, approximately 80 employees formed three
teams in a weeklong competition to increase their safety awareness
while earning points and winning prizes along the way. Likewise,
a warehouse in Anaheim, California, plays Safety BINGO, where
numbers are pulled only on days when no safety accidents or
incidents have occurred, and no safety procedures have been violated.
Winners are treated to lunch. The warehouse manager cites this
ongoing incentive as part of helping her team reach eight years of
no accidents or incidents.
Logistics Safety
Our logistics network is made up of warehouse and distribution
employees who ensure our products and materials arrive at the
right place at the right time. In 2014, Liberty Mutual Insurance
recognized each of our warehouses in the Southeast region with
its prestigious Safety Commendation Award for an exemplary
safety record of at least 50 percent better than the Bureau of
Labor Statistics’ published rate for the industry. Meanwhile,
across the country at Mohawk’s Anaheim, California, warehouse,
the team reached eight years of zero accidents or incidents.
In Europe, an entirely different aspect of logistics safety has been
highlighted with the marked increase in international trade and
concurrent attention to biodiversity and forest health. These
dynamics have raised concerns about the inadvertent export of
quarantined pests in wood packaging material. Consequently,
Marazzi achieved phytosanitary certification for U.S. export in
2014. Phytosanitary measures that are applied to wood packaging
materials significantly reduce the spread of harmful pests associated
with international trade, making shipments safer and protecting
ecosystems, while greatly reducing delays and costs during U.S.
Customs inspections.
Additional engagement initiatives across the Company include
the continued use of employee safety perception surveys, regional
reviews of employee safety teams and the development of Key
Performance Indicator (KPI) safety scorecards for tracking safetyrelated behaviors and activities. Corporate Safety Services also
provides monthly messages on the myMohawk employee website
and on digital signage to support our commitment to safety.
In addition, we continue to support the Marble Institute of
America’s safety committee, which is an industry organization
that we helped establish, with the goal of increasing safety —
not just at Mohawk, but throughout the industry.
GROWTH
DONE WELL
The benefits of stretching before exercise are well
documented, so it makes sense to do the same before
physically demanding work. That’s the idea behind our
stretch and flex program, “Fit 4 Work.” This program
combines principles of wellness, injury prevention, ergonomics and industrial safety into a customized exercise
program that stretches muscles and joints related to job
duties. Employees are urged to go through the routine
near the beginning of their shifts. With built-in measurement methodology, the program has documented a
30 percent overall range of motion improvement and
decrease in pain since being implemented.
PEOPLE
|
Training & Development
PEOPLE
23
| Workforce Profile
From the front line to the leadership suite, targeted, effective training
is vital to growing well. Our training organization is responsible for
creating and implementing the tools that drive year-over-year
improvement and foster an innovative culture that competes
successfully in the marketplace to deliver superior results.
With this in mind, we align training content with the Company’s
evolving business needs and refine it based on feedback and results.
Each year, we assess our delivery platforms, metrics, governance
structure and team to identify areas where we have made marked
improvement, as well as areas in which we can challenge ourselves
to be more effective. Our significant investments in training are wellplaced ones in the success of our employees and the Company alike.
Across the Company, we offer training linked to specific business
objectives in order to bring clear focus and value to the endeavor.
Demonstrated examples of success include:
• “Managing for Innovation” classes in which floor managers learn
how to help their team identify opportunities for improvement,
study potential process improvements, test methods via pilot
programs, then refine and implement new best practices
throughout the organization. The number of manufacturing
best practices identified and deployed in 2014 was up 11 percent
over 2013.
• Career counseling tools to improve managers’ ability to help team
members understand career options and develop the skills necessary
to pursue them. Structured performance development workshops
and online training modules provide managers with a foundation for
delivering constructive feedback and identify mentors or external
resources to address skill gaps. As a result, the percentage of positions
filled through internal promotion increased 200 basis points from
2013 to 2014.
• Training that emphasizes a diversity of learning styles and promotes inclusion at all levels of the organization. This has led to the
creation of more diverse selection pools of candidates with potential. In year-over-year comparisons, the percentage of women in
these pools has increased from 39 to 47 percent and minority
candidates from 27 to 41 percent.
• Communication skill enhancement through classes such as
“Business Writing in the Electronic Environment,” which helps
employees communicate in a more concise and effective manner.
Based on post-training surveys of participants’ managers, the
average number of emails required to successfully share information dropped from 4.2 to 2.7 messages, driving efficiencies
in time and resources.
24
PEOPLE
| Training
Workforce
& Development
Profile
These are but a few examples of the expansive training initiatives
in place in manufacturing, distribution, sales and administrative
areas. Such programs are a primary reason why Training magazine
recognized Mohawk Industries once again in 2014 by ranking us
fourteenth in their Top 125 training companies. Notably, Mohawk
was the highest-ranked manufacturing organization. This
annual list recognizes outstanding training programs at every level
throughout an organization and how effectively they are linked to
strategic goals and business priorities. Our 2014 recognition marks
Mohawk’s tenth consecutive appearance in the Top 125.
GROWTH
DONE WELL
For our Laminate & Wood segment, innovation is at the
top of the priority list, which means engineers must
keep their expertise up-to-date. In the past, external
partners provided staff training and education, but they
frequently did not target the exact needs of the business.
Employee Evaluation
Consequently, we have developed our own on-site
Evaluation and review also is an important component of continuous
improvement and professional development. The manner and
frequency of our evaluation and communication with employees
about their performance varies by type of position and geographic
region. Generally, all salaried Mohawk employees throughout
the world receive regular performance and career development
reviews. For hourly employees, plant management determines the
most constructive manner in which to evaluate performance based
on operational processes in the plant, as well as customary practices
in certain regions of the world.
Technical Training Center to provide training in specific
areas such as technology, machine control and health
and safety. Well-structured education helps ensure that
we have the best-qualified engineers possible, which
improves expertise and staff retention.
The Center also acts as a test lab and is used by Unilin to
find solutions to actual problems that could not be tested
Global Training Hours per Employee
Roland Diet explains, “Here we can implement modifications and perform tests, which we would not be able
Job Type
Sales/Clerical
Technical/Manual
in a production environment. As Automation Engineer
7.33
20.94
to do on a machine in full operation in the production
environment. This enables us to remain in the lead. “
While we provide an overview of training hours by position, it is Mohawk’s belief that training occurs at a
much higher rate across the Company than reported because not all training is tracked.
By providing education and training, we are able to
ensure we have among the best-qualified engineers and
are well positioned to retain them. The Center is also available to students who come to us on work placements and
to university students writing dissertations. This makes
the Laminate & Wood business an attractive workplace of
choice for students entering the workforce.
25
PEOPLE
| Training
Workforce
& Development
Profile
GROWTH
DONE WELL
Apprentice Programs Work for Everyone
Training is a vitally important component of remaining competitive in today’s marketplace, and the importance of multiple
educational pathways for students is well established. Today, there are no “one-size-fits-all” approaches that meet the needs of
all students or businesses. That’s why our hardwood manufacturing facility in Holden, West Virginia, entered an agreement in
2014 to create an apprenticeship program with Southern West Virginia Community and Technical College.
The Holden apprenticeship program is designed to enhance the skill level of current employees and offer educational options to support
their future employment goals while helping them increase their contributions to the business. The College provides employees with an
associate’s degree program focused on mechatronics, an interdisciplinary field involving control systems, electronic systems, computers and
mechanical systems that integrate product design and automated manufacturing processes.
Similarly, our facility in Danville, Virginia, has created an apprenticeship program in partnership with Danville Community College (DCC),
designed to address the need for skilled workers in the maintenance department. The program includes classroom work and hands-on training in the college’s technical lab; one-on-one, on-the-job training with highly skilled Danville employees; and incremental wage increases.
These apprenticeship programs benefit both students and employers as industrial applications become increasingly complex and industries
need technicians with cross-disciplinary skills. The goal is to ensure employees are constantly moving forward and attaining knowledge and
skills that will equip them to reach new goals.
26
PEOPLE
| Training
Workforce
& Development
Profile
GROWTH
DONE WELL
Everyone Owns Zero Waste
Almost every type of manufacturing produces a waste stream. While we cannot always prevent that waste, our Zero
Manufacturing Waste to Landfill program aims to repurpose all process waste at all of our facilities. The basic business
principle behind our Zero Waste proposition is simple: Any item sent to a landfill wastes materials that could be recycled,
repurposed or up-cycled, often saving or earning dollars in the process. Success, however, requires employee understanding
and engagement.
With that in mind, we initiated a training and employee engagement program designed to reduce waste and redirect waste streams. This
initiative simultaneously supports our goals of increasing profit margins and creating sustainable practices. We piloted the program at
one of our rug manufacturing plants in north Georgia. Rather than sending engineers to examine the facility’s waste stream and define
possible solutions, we tapped into the good ideas of employees on the floor, gaining insights from their firsthand knowledge of the
processes and equipment at the facility. Individuals who found the most viable solutions were invited to join the program leader at the
next facility.
This variation on the train-the-trainer concept allowed employees to take a direct role in driving positive change. As a result of their
engagement in the process, they took ownership of the program — an essential component of its success across the facilities. They
act as trainers for new employees to ensure that compliance with the waste-elimination initiatives is consistent across the facility
and that knowledge can be applied for greener living at home.
Since its inception in 2012, the Zero Waste program has been replicated across 25 facilities within the Company’s U.S. operations, with
each successive implementation gaining greater success as best practices from similar facilities inform the process. When improved best
practices are identified, these are also communicated back to facilities to replace old processes. In late 2014, we began to roll out the Zero
Waste program to the remainder of our North America operations, with the intention of adding international operations in the future.
PEOPLE
|
Employee Relations
PEOPLE
27
| Workforce Profile
Labor Standards
We strive to be an exemplary employer. We believe that people
perform their best when they are treated with a high level of personal
dignity and respect. We also believe that we offer competitive wages
and salaries to all employees relative to the local labor market. We
operate in full compliance with all material applicable labor, health
and safety regulations. We also uphold all International Labour
Organization (ILO) labor standards.
Our intent is always to respect and follow customary practices and
local market regulations as they relate to the rights of workers to
decide whether to enter into collective bargaining representation.
We also believe that open, direct and constructive dialogue between
workers and management is the most effective way to reach mutually
agreeable solutions to workplace issues. Accordingly, we encourage
direct contact between our employees and management.
We have collective bargaining agreements with 31.8 percent of
our employees, the majority of whom are employed in our Mexican,
European and Asian manufacturing operations. Most of our U.S.
employees are not party to any collective bargaining agreement.
There have been no work stoppages in any facility now owned by
Mohawk Industries in at least five years. We believe that our relations
with our employees are good.
In the United States, the federal WARN Act establishes that companies
must notify employees 60 days prior to the closing of a facility or a
significant reduction in a facility’s workforce. In Mexico, the notice
periods for operational changes are based on agreements with the
union representatives at the facility. In Europe, the notice periods for
operational changes are based on collective bargaining agreements
and/or legislation. Once the Company ratifies this agreement, its
content is binding for all manufacturing employees, regardless
of whether they individually opt for membership in the union or not.
In Malaysia, according to the Employment Act of 1955, companies
operating there must submit any operational changes, including
shutdown, retrenchment or redundancy, to the Labor Department
no later than 30 days prior to the action. In the event an agreement
has different requirements, we will abide by those requirements.
Human Rights
We support the premise that all people deserve a life with freedom
and dignity, which is conducive to their physical, mental, social and
spiritual welfare. We recognize that challenges to these principles are
present in certain regions of the world where human rights have not
progressed to the same standards as those we support. When our
business extends into these regions, we are particularly sensitive to the
potential for transgressions and are committed to combating them.
We prohibit the use of all forms of child labor or forced labor, including
indentured labor, bond labor, military labor or slave labor, at all of
our locations, domestic and international. We have policies in place
throughout our global operations to ensure that these types of labor
are not utilized. We also have procedures in place for our people to
report complaints and grievances, should there be a question about
labor practices.
Mohawk adheres to minimum age provisions of applicable laws
and regulations in the areas where we do business and requires legal
documentation for age verification. Our prohibition of child labor is
consistent with ILO standards. We have found no significant risk for
incidents of child labor or risk of forced or compulsory labor in our
operations around the world.
Since our last Sustainability Report was published — and in 2014
overall — there have been no claims of discrimination filed against
Mohawk by individuals who are identified as members of indigenous
people in the regions around the world where we operate.
PEOPLE
|
28
Wellness
PEOPLE
| Workforce Profile
An increased participation in our wellness programs and reduced
healthcare costs are among the trends that demonstrate our investments in preventive care are working for our employees and business.
In North America, Healthy Life Centers (HLCs) at our largest facilities
are the centerpiece of our wellness initiatives. Currently, 14 HLCs log
more than 4,000 visits per month. In addition to preventive care, HLCs
provide acute care, chronic disease management, preventive exams,
pediatrics, no-cost employee-medication programs, mobile mammogram screenings, pre-placement examinations, wellness coaching
and integrated care coordination with primary care physicians.
The majority of our HLCs are part of our operations in Georgia. We
also have two Dallas-area HLCs for our employees in Texas; a new
location in Florence, Alabama; and integrated on-site/near-site
combined service with local primary care physicians in Eden, North
Carolina, and Danville and Glasgow, Virginia. We also are piloting
an on-site coaching program in Muskogee, Oklahoma, with HLC
providers and exploring telemedicine opportunities, supported by
HLCs, to service remote rural areas.
All of our locations have seen an increase in participation and in
the overall health of participants. For 2014, HLC utilization was at
80 percent, and preventive care increased 13 percent. Overall, our
wellness initiatives have increased health engagement and helped
to close gaps in care and medication compliance for individuals
with chronic conditions. Though these results are impressive, the
continued improvement in the health and lives of our employees is
even more valuable.
Outside the U.S., our ceramic facility in Monterrey, Mexico, has managed a successful on-site health clinic for more than 25 years, resulting
in a steadily declining absentee rate. In Europe, Unilin’s “Feel Good”
program is an effort to make employees more aware of their personal
health through activities such as initial organized running and cycling
outings, in addition to various nutrition programs.
Our corporate Training and Development team assists with health
and wellness initiatives as an extension of their efforts to create a satisfied and productive workforce. This reflects our belief that the key to
retaining good employees is to help them achieve their best, both in
terms of their professional development and their quality of life.
Employee Benefits
In addition to our wellness centers, we offer to U.S. employees a
comprehensive set of insurance, retirement and other benefits for
which we pay all or part of the cost. These benefits are available to any
employee who works 20 or more hours a week, whether hourly or salary-based, and who has worked for the Company for at least 90 days.
Some of the benefits we offer include:
• Consumer-centric medical and pharmacy plan, plus dental
and vision options
• A Company-matched 401(k) retirement savings plan
• Short- and long-term disability insurance
• Life insurance, critical illness and accident plans
• Paid holidays and vacation
• Tuition reimbursement
Our benefits programs outside the U.S. vary according to country,
local market standards and employment contracts.
We offer our U.S. employees a consumer-driven health plan with a
health savings account. Recognizing the complexity of the subject
and lack of familiarity most of our employees had with such a plan,
we made a significant investment in resources to help our employees
understand their options and make the choices that are best for
them and their families.
In addition to traditional training materials, as well as a text-messaging campaign, our Training and Communications teams partnered to
produce a first-ever video series delivered via YouTube and Company
intranet. Three months after the first video aired, that segment had
been viewed over 4,500 times — representing nearly 25 percent penetration in the U.S. employee base. Each portion of the series focused on
a different aspect of healthcare — offering information in small, easily
absorbed segments. Significantly, surveys indicated that those who
had watched some or all of the series had a 22 percent greater understanding of the key concepts behind the healthcare plans, meaning
that they could make better-informed choices for themselves and
their families.
PEOPLE
|
29
Community
PEOPLE
| Workforce Profile
United States Marine Corporal Todd Love lost both legs and an arm while on patrol in Afghanistan. Mohawk and Dal-Tile donated all of the flooring and ceramic tile for a custom-built Smart Home in Douglasville, Georgia,
where he has maximum accessibility and can feel at home.
As Mohawk grows around the world, we bring with us a long history
of commitment to the communities in which our manufacturing
facilities are located — the same communities our employees and
their families call home. This commitment and our corporate philanthropic efforts are aligned with causes through which we can
leverage our strengths and core capabilities.
The Mohawk Foundation supports non-profit organizations that
benefit our employees and their families in our communities.
In particular, the Foundation funds organizations whose services
impact a significant and diverse population and that have a
proven track record of delivering results. The Foundation also makes
significant annual grants that benefit the Floor Covering Industry
Foundation, Boys & Girls Clubs of America, American Cancer Society
Relay For Life, and groups that support children and adults who are
victims of abuse. Created by Company management and granted
non-profit status in 1990, the Foundation continues to be funded
solely through the Company.
In Northwest Georgia, where our headquarters is located, the
Company, the Foundation and our employees are significant
donors to the local chapter of United Way. In 2014, Mohawk
committed more than $500,000 in funding and was responsible
for the largest overall dollar increase — 29 percent — in the area.
Mohawk and the Foundation also were recognized as a 5-Star
Champion, a designation for companies that meet several criteria
that include employee impact tours to understand how United
Way investments are used in the community.
Veteran Housing
Mohawk was the premier sponsor of “Mohawk Presents: Calhoun’s Dancing with the Stars,” the third year
for this major United Way fundraiser that raised more than $150,000 in 2014. Featured above are
Renee Brown, a Mohawk Industries employee, and Kevin Smith, her partner and a local dance instructor
in Calhoun, Georgia.
Organizations that provide homes for those in need offer a natural
tie-in with our flooring businesses, and, in particular, we welcome
opportunities to honor the sacrifice of veterans and their families by
giving to them in return. We are proud to be a flooring partner for
Operation FINALLY HOME, a non-profit organization that provides
mortgage-free homes to wounded veterans or spouses of the fallen.
Builders and building product manufacturers provide 100 percent
of the donations required to build the homes, which are custom
designed to meet the particular physical needs of individual veterans. At year-end 2014, Mohawk had covered the floors of 10 homes
for these deserving men and women.
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PEOPLE
| Community
Workforce Profile
Our support of U.S. veterans extends to Building for America’s Bravest,
a program in partnership between the Gary Sinise Foundation and the
Stephen Siller Tunnel to Towers Foundation. The program provides
Smart Homes for severely injured service members, with each home
custom designed to meet their specific needs. Mohawk and Carpet
One are providing all flooring materials and installation for 46 Smart
Homes to be built over the next three years.
Disease Prevention and Research
We also involve our customers and our products in supporting
disease research in meaningful ways. Two longtime initiatives that
allow us to leverage our products to increase our impact are Specify
for a Cure® and Decorate for the Cure®, programs of Susan G. Komen
for the Cure®, to benefit breast cancer research. Through Decorate
for the Cure, we donate a portion of all Mohawk SmartCushion™ and
Karastan KaraStep Reserve™ cushion sales to Komen. Specify for a
Cure makes donations to Komen when commercial customers
specify select carpet styles. In 2014, we celebrated our thirteenth
year of partnership with Susan G. Komen for the Cure®, and are
proud to report that cumulative donations have reached nearly
$4 million. In addition to corporate-level initiatives, we are proud
GROWTH
DONE WELL
Businesses acquired by Mohawk join a very supportive
family of other businesses. Mohawk and Dal-Tile team
members had an opportunity to demonstrate this
after a tornado destroyed Dal-Tile’s Marazzi Sales Service
Center (SSC) in Oklahoma City, less than one month after
Mohawk acquired Marazzi. The building was a complete
disaster, with only the outside four walls remaining. The
storm hit on a Friday night; on the following Monday
morning, the Mohawk Distribution Center and Dal-Tile
SSC in Oklahoma City opened their doors to the Marazzi
SSC staff, enabling them to reconnect with their customers almost immediately. Rebuilding began quickly,
and within a year, Marazzi SSC staff welcomed customers and colleagues into a new office, customer service
area, warehouse and showroom.
of the grassroots support of Dal-Tile and Unilin employees, who, for
the fifth consecutive year, raised additional money toward breast
cancer awareness through t-shirt sales, with all profits going to
the American Cancer Society.
Economic Impact
As we open new facilities around the world, we are more mindful
than ever that our business and the communities in which we operate have mutual interests and goals. Strong communities help to
sustain a strong workforce, which has a direct effect on our financial
and operating performance. We collaborate with government and
community leaders to identify ways in which our business and the
surrounding community can work together to enhance the local
quality of life as well as the business climate.
In this spirit, cultivating strong relationships with the communities
where we operate is a key part of our facilities’ success. Dal-Tile is
demonstrating that approach in Dickson, Tennessee, where its eleventh manufacturing facility in North America is under construction.
Even before breaking ground on the project, Dal-Tile began reaching out to the community — acknowledging that it will be through
the help of many people and businesses in the Dickson area that
the facility will thrive.
A similar approach is taken in the event we must exit a community
due to closure of a facility. We work with local and state Department
of Labor officials to identify career opportunities for those employees who will be losing their jobs. We also work closely with the community to find a buyer for the facility, with the goal of helping to
create new economic opportunities.
As we continue to expand around the world, we recognize our
growing responsibility to be good corporate citizens. We are committed to expanding in a responsible manner and to working with
our stakeholders to improve the quality of life in all our communities.
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PEOPLE
| Community
Workforce Profile
GROWTH
DONE WELL
Building Sustainable Communities
We are proud to have helped 150 families get a new start over the past five years through our commitment to Atlanta Habitat for
Humanity. We began our partnership with Habitat in 2009, donating carpet and pad for several houses the first year. Today, we
provide carpet, pad and resilient products for the many homes Atlanta Habitat builds or refurbishes annually.
Our investment in Habitat, however, goes beyond product donations. Employees from both Mohawk Commercial and Residential carpet
divisions have been fixtures at work sites for years, eager to help with anything from building and raising the walls to landscaping.
“Our commitment to Habitat and actively helping our local communities permeates our entire organization,” said Michel Vermette, Senior Vice
President of Mohawk Commercial and International. “In fact, Habitat projects serve as excellent team-building events for our business.”
Since Atlanta Habitat homes are designed to be affordable, easy to maintain and environmentally friendly, we donate EverStrand® as the
carpet of choice. With up to 100 percent recycled content, EverStrand is inherently stain-free and easy to clean, giving new homeowners the
benefits of value, beauty and sustainability.
Habitat support also extends to the national level, where the Dal-Tile Strategic Business Unit was a 2014 corporate sponsor for Habitat for
Humanity builds across the U.S. Dal-Tile team members started by participating in day-long home builds within their communities in Orlando,
Florida; Charlotte, North Carolina; Indianapolis, Indiana; and Raleigh, North Carolina. In addition, approximately 100 Habitat homes received
donated tile for installation in the new homes’ kitchens or bathrooms.
Our partnerships with Habitat for Humanity build more than houses — they help build family success through sustainable homeownership,
and they build our effectiveness in bettering the communities we call home.
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PEOPLE
| Community
Workforce Profile
Growth Done Well, Locally
Unilin Thomasville
Each year, the Unilin Thomasville campus holds its annual canned
food drive to help the local community with the increased demand
for food during the holiday season. The can drive collects food to be
donated to the Salvation Army and Pastor’s Pantry — a non-profit
food pantry that targets senior hunger.
Mohawk Bennettsville
Employees at three Mohawk facilities in Bennettsville, South
Carolina, joined together to adopt three local families for the 2014
holiday season through the Marlboro County Department of
Social Services’ Christmas Stocking Project. Leading up to the
holiday season, employees donated everything from shoes and
clothes to trains and dolls.
Dal-Tile Dallas
Dal-Tile Project Engineer Dan Phipps has volunteered every weekend for the last four years with Feed the Hungry, an East Dallas
non-profit that provides food for needy families in the area. Every
Saturday morning, local residents can get a free, hot, nutritious
meal. When the organization’s primary transport vehicle had to
be retired, Phipps donated his Toyota 4Runner to replace it.
Marazzi Southern Nevada
Marazzi was one of six tile companies at the 2014 Coverings trade
show in Las Vegas that crafted and donated beautifully tiled
benches to the Boys & Girls Clubs of Southern Nevada. The
benches were distributed to area clubs that provide safe, healthy
after-school activities for more than 30,000 children per year.
Unilin Danville
Prior to the holidays, Unilin’s Danville manufacturing facility and
Kentucky Distribution Center in Virginia hosted a coat drive, collecting many new and gently worn coats for less fortunate families in
their community. The facilities also collected canned food throughout the month for a local non-profit called God’s Storehouse.
Mohawk Foundation
A $15,000 donation by the
Mohawk Foundation helped
reopen the doors of the
historic Martin Theatre in
downtown Roanoke,
Alabama, after nearly
30 years.
Dal-tile Mexico
At Dal-Tile Mexico, Maintenance Manager Luis Sandoval is continuing a long-time family tradition to provide Christmas gifts to
children. Since 1972, his family has been delivering clothing, toys
and candy to children in need. The family sells tamales and organizes other fundraising events, then rents two buses to distribute
the gifts.
MOHAWK
Product Stewardship
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PRODUCT STEWARDSHIP
|
Approach
Mohawk offers hundreds of products that meet consumer needs for
design, functionality, quality and value in a sustainable manner. These
products may contain post-consumer and industrial materials, or
originate from renewable resources.
As a vertically integrated manufacturer, we look at the whole of a
product’s life cycle — considering not only what we make, but also
how we make it. It is this combination of structure and approach
that allows us to enhance the sustainability of our products at virtually every point, from sourcing to manufacturing, distribution,
marketing, installation and end-of-life.
Creating a More Sustainable Life Cycle
Increasing the sustainability benefits of our products starts with
choosing raw materials that are renewable, sustainably harvested or
recycled. We produce flooring from post-consumer recycled material such as PET soda bottles, rubber tires, plastic bottle caps, glass
and more. All of our manufactured ceramic products contain recycled
materials. We also achieved an industry first with our SmartStrand®
carpet, the first carpet made with a renewably sourced polymer.
Our manufacturing process capitalizes on many opportunities to
use less water and energy, reduce emissions and divert waste from
landfills. In North America, for example, six of our 10 ceramic tile
manufacturing plants recover and re-use 100 percent of their process wastewater. In addition, our U.S. laminate and board facilities
recycle scrap wood into chipboard products or sell waste material
to a third party. We also manufacture our flooring to be durable
and long lasting, which keeps it on floors and out of landfills.
When distributing products, our logistics team — which manages one
of the largest warehousing and distribution networks in the industry
— has become a driver of sustainability. This energy-intensive area
offers many opportunities for generating efficiencies. We have implemented energy-saving programs, such as route optimization, the use
of liquefied natural gas (LNG) trucks in California and the installation
of a fuel filling station at our headquarters in Calhoun, Georgia. We
continue to seek out and implement best practices in transportation
to get our products to market in the most efficient ways possible.
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Our product marketing is also growing more sustainable through
the increased use of online tools. This makes it easier for our customers and consumers to choose the right products while reducing
our use of paper and the production of product samples. QR codes
on our in-store samples and displays, for example, drive consumers
to our website for product information, enabling us to reduce the
use of printed materials. Our suite of interactive tools for commercial
customers allows them to deliver a variety of design and environmental options to their own customers virtually, and to make
changes instantly if needed.
Installation is an important phase for the majority of our flooring
products and one in which we seek to minimize the use of materials. Unilin’s patented Uniclic® technology is a good example. Uniclic
offers an easy installation method that uses no glue or other
chemicals, thereby helping to improve indoor air quality. We also
have reduced the chemicals used in many of our carpet adhesives,
including zero-VOC NuSpraylok®, used for commercial carpet tiles.
We engineer many of our products for re-use or end-of-life recycling.
In Europe, we are studying the feasibility of repurposing
post-consumer wood waste in order to develop a more circular
economy for laminate manufacturing. In the Carpet business, our
ReCover reclamation program for commercial and residential customers keeps carpet out of landfills. With just a phone call, we will
arrange for the removal, pickup and delivery to a processor of any
type of carpet, regardless of whether we manufactured it.
Finally, our business depends on meeting the needs of our customers
with safe, high-quality products for their homes or businesses. We
intentionally design our products to meet or exceed all health,
safety and quality standards, as well as local, state and federal laws.
This is more than just a good business decision. It also is good for
our customers and is the right thing to do.
Mohawk will continue to make products using ever more responsible
methods and materials in order to protect the health and safety of
our customers, ensure the quality they expect and reduce the
impact on our environment.
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Product
PRODUCT STEWARDSHIP
Approach | Approach
GROWTH
DONE WELL
Tomorrow’s Insulation, Today
Part of growing globally is meeting market-specific challenges. In Europe, for example, regulatory requirements for environmental
attributes have become ever more stringent. Thoughtful innovation of laminate and wood products has helped keep the business
in the forefront of these requirements. Unilin’s insulation division has been a leading player in the market of exterior insulation for
a number of years, offering insulation products for roofs, walls and floors. With the French market specifically in mind, Unilin is
now expanding its range with ISOCOMBO, a new insulation panel for indoor use.
ISOCOMBO couples the thermal performance of polyurethane with the acoustic properties and versatility of glass wool. This combines the
best attributes of both materials and makes it possible to meet regulatory requirements without shrinking the habitable surface area of a
house, especially valuable in a region where living space can be at a premium. ISOCOMBO provides energy efficiency and easy fitting since
all cables can be concealed inside the flexible glass wool.
This new application did not go unnoticed. In November 2014, more than 400 construction professionals awarded ISOCOMBO the Gold Medal
for Innovative Worksites in the Finishings & Fittings category of the French Houses Union challenge. After an initial launch in France, we plan to
introduce ISOCOMBO to the interior insulation market of other countries.
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Product
PRODUCT STEWARDSHIP
Approach | Approach
GROWTH
DONE WELL
Advancing Toward a Circular Green Economy
Post-consumer wood waste is one of the most important biomass waste streams in the Flanders region of Belgium. With very
limited forestry in the area due to land constraints, both new and recycled wood is scarce. Households and businesses dispose
of well over 600,000 tonnes, or 1.32 billion pounds, of wood waste per year. Repurposing post-consumer wood waste — as a
raw material stream — is absolutely vital to the growth of the region.
While waste wood can be burned as biomass fuel, the
Flemish Material Decree stipulates that wood streams
must be used as raw material as often and as long as
possible before ending up as biomass. The physical
and chemical properties of wood, however, make it
an inherently difficult material to transform. This
presents a challenge for wood processors who must
segregate wood that is a good candidate for recycling.
To study how to overcome this challenge, Unilin,
along with several key partners, has undertaken a
two-year project, OPT-I-SORT, with a goal to repurpose post-consumer wood — providing at least one
more life as a raw material before the wood is used
as biomass.
The project aims at closing even more of the wood
material cycle, decreasing the import dependency
for wood and reinforcing the role of the sector in
material technology. In cooperation with waste collectors, waste sorters and recyclers of post-consumer wood waste, different scenarios are being developed, explored, tested and evaluated. Through this unique total value chain
approach, the best scenario will emerge to offer sustainable added value for all links of the chain.
OPT-I-SORT was one of only 14 projects chosen, out of 43 applications, to receive a government grant for environmental innovation projects to find
a better way to close the material loop for wood in the region. Moreover, OPT-I-SORT was the only one of the projects to receive the full amount
of funding requested, with Unilin funding the remainder. OPT-I-SORT is positioned to play an important role in the transition of the Flemish
woodworking industry to an even more sustainable industry sector in the Flemish green closed-loop economy.
PRODUCT STEWARDSHIP
|
Customer Tools
Digital customer tools that allow easy comparison of the attributes
of building and décor products are in demand among commercial
and residential customers alike. Commercial customers, particularly
those who are pursuing Leadership in Energy and Environmental
Design (LEED) certification from the U.S. Green Building Council,
value our suite of Web-based, interactive tools that enables them to
more quickly share accurate designs and environmental information
with their customers while reducing the use of paper and physical
samples. For residential customers, our tools that allow them to visualize and compare products before purchasing are a differentiating
factor. Above all, digital customer tools are a win for the environment
— helping us cut waste by greatly reducing printed materials.
At our new design studio in San Francisco, for example, digital
tools allow residential customers to bring their design ideas to
life. Using LCD touch screens, customers can virtually flip through
digital catalogs for Dal-Tile and Mohawk Home, view inspiration
gallery images and build out designs with a tile and stone visualizer tool. Light panels show how tile will look in different settings
in the home, an important factor in choosing the correct tile for a
customer’s space.
Another tool for residential customers is Quick-Step®’s new
proprietary digital visualization tool, “Style My Floor.” This new
smartphone and iPad app lets consumers realistically see what a
particular Quick-Step floor would look like installed in any room.
Using augmented reality technology, the app displays a virtual
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floor over the room’s existing floor when viewed on the customer’s
screen. This allows the customer to envision what the product will
look like before making a purchase.
In addition, information on our entire commercial carpet product
line is available on GreenWizard, a leading software provider for
the design and construction community that simplifies the process
of managing sustainable construction projects. GreenWizard
enables users to search for sustainable product attributes, as well
as for products that support Living Building Challenge certification
projects. For LEED certification projects, GreenWizard offers an
end-to-end solution by utilizing a proprietary credit assessment
tool to model and optimize LEED credits, manage product-related
documentation and automate the online submission process.
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PRODUCT STEWARDSHIP
| Customer Tools
We also offer the ability to create realistic carpet tile and hard
surface simulations. With our render-ready images, we provide
optimized images that are light balanced, color corrected and
sized to scale. All images are processed at 150 dpi and available
in a number of recommended installations.
.
Another tool, the industry-first DesignFLEX Visualizer, allows
designers to create and demonstrate any of the thousands of
unique installations possible with our innovative State of Mind
modular carpet collection. This interactive tool also eases the
specification process by maximizing design accuracy.
The Mohawk Group catalog app for the iPad allows designers and
architects to search our comprehensive commercial product catalog on demand, order product samples and email product ideas to
colleagues and clients. Not only does this app provide customers
with instant access to a wide range of product information, but it
also helps reduce the amount of paper used for print catalogs. In
the field, our commercial sales organization uses iPads exclusively,
along with the proprietary sales automation tool, which enables
our sales force to be more responsive to customers while further
reducing our use of paper.
Dal-Tile’s virtual Web catalog reduces our need to print and ship
these materials, while allowing for real-time updates when product lines are added, extended or discontinued during the year.
The catalog gives users on-demand access, is available in multiple versions depending on the user’s needs, can be downloaded
for print and shared via email or social media, such as Facebook,
Twitter or LinkedIn.
Because online tools will not replace a physical sample in every
instance, we offer a sample take-back program for commercial
customers. A return-mail bag ships with our samples so that they
can be returned to us when no longer needed. We are able to
re-use approximately 85 percent of the sample folders that are
returned, keeping these materials out of landfills.
PRODUCT STEWARDSHIP
|
39
Certifications
There is a lot of green in the world today. Green products and
green claims have become ubiquitous in many product categories. With so many manufacturers making sustainability claims
about their products, how do consumers find the environmental attributes they seek? And how can they be sure the claims
that manufacturers make about green products are true?
Certifications are a useful way to help customers sort through these
claims. We only make product claims that can be independently verified by third-party auditors, so consumers can be confident they are
receiving the value for which they are paying. We intentionally seek
out meaningful, transparent assurance, often from organizations
that consumers already recognize, such as Underwriters Laboratories
(UL), the global independent safety science organization that has
been around since 1894.
We also include our verified environmental claims on our marketing materials, deck boards and other merchandising and point-ofsale materials so customers can easily find products with the green
attributes they seek. These independent third-party certifications
mean that many of our products meet the criteria required for
installation by well-respected green organizations such as the U.S.
Green Building Council — which certifies LEED buildings — the
Collaborative for High Performance Schools and the Green Guide
for Health Care.
Ecolabeling in Europe
Marazzi®’s commitment to measuring the environmental impact
of tile products and to the transparency of those metrics is apparent in the certification under the European ecological label (Type 1).
The EU Ecolabel denotes products and services that have a reduced
environmental impact throughout their entire life cycle — from the
extraction of raw material through production, use and disposal. In
particular, the aims of EU Ecolabel are to reduce impacts on habitats;
energy consumption; discharge of toxic substances into the environment; dangerous substances used in materials and finished products; and risks to health in the living environment. Additionally, the
EU Ecolabel promotes information that will enable the consumer to
use the product in an efficient way that minimizes general environmental impact. Marazzi completed certification for 31 product series
in 2014, bringing its total EU Ecolabel-certified product lines to 41.
Environmental Health and Product
Declarations
Our ongoing application of life cycle assessment (LCA) helps us to
better understand and evaluate the complete impact of our products. We use LCAs to identify sustainability opportunities and
inform consumers about the environmental attributes of products.
Many of our businesses use LCA insights to implement Environmental
Product Declarations (EPDs), which are the most complete environmental footprint assessments currently available, and Health
Product Declarations (HPDs), which provide information on
product contents and health impacts, if any.
We have fully implemented EPD programs for our laminate and
wood products sold in European Union markets. We also provide
EPDs and HPDs for our commercial carpet portfolio. During 2014,
Dal-Tile became the first manufacturer in the ceramic tile industry
to voluntarily disclose cradle-to-grave inputs on all products manufactured in North America through UL Environment-EPDs for
its three brands. Our Ceramic business also has created HPDs for
its brands through a comprehensive evaluation of all tile bodies
and glazes.
During 2014, concerns about formaldehyde emissions in laminate
and engineered wood products sourced in China surfaced in media
reports. While formaldehyde is a naturally occurring substance in
all wood, high levels considered harmful for humans can occur
when resins and glues containing high levels of formaldehyde are used
to manufacture laminate core board and plywood for engineered
wood flooring.
An independent third-party certifier tests all of our laminate
and engineered wood flooring in accordance with the California
Air Resources Board (CARB) regulations to meet CARB Phase 2
standards. Mohawk regularly checks to ensure all certification is
updated and that all CARB requirements are met. In addition,
all Mohawk laminate and engineered wood flooring has been
tested by an independent laboratory and have been awarded
FloorScore® certification based on the CDPH Standard Method
V1.1. This means Mohawk products do not release harmful volatile
organic compounds (VOCs) into living environments.
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PRODUCT STEWARDSHIP
| Certifications
Mohawk products that carry the following certifications have been independently verified as products that reduce impact on the environment:
Carpet & Rugs
NSF 140 is the first U.S. national commercial carpet sustainability certification based on life cycle
assessment principles. We offer a number of NSF 140-certified products.
Underwriters Laboratories provides Environmental Claim Validation to verify the recycled content
of products such as EverStrand® and Wear-Dated® Revive™ carpets.
Carpet and Rug Institute (CRI) Green Label and Green Label Plus certify that our complete line of
carpeting, as well as products such as SmartCushion™, will not adversely affect indoor air quality.
U.S. EPA Design for the Environment certifies that our cleaning products are formulated from
ingredients that are the safest possible for individual health and the environment.
GREENGUARD® Indoor Air Quality certifies that products designed for use indoors, such as our
Eco Cushion mats, meet strict chemical emissions limits.
ILFI Declare® is a product label developed by the International Living Future Institute (ILFI) that tells
the user about the types of materials used in a particular building product, including the material’s
origin, composition and end-of-life disposal.
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PRODUCT STEWARDSHIP
| Certifications
Tile
Green Squared® certification is a whole-product, multi-attribute standard, based on life cycle assessment
principles, which documents that the product and process meet strict environmental and social criteria.
Most of our ceramic products manufactured in North America have achieved Green Squared certification,
which provides third-party verification of conformance with ANSI A138.1, the national standard for
sustainable tile products.
Laminate & Wood
FloorScore® certifies that laminate and hardwood flooring, such as our Mohawk®, Quick-Step® and
Columbia® brands, meet strict indoor air quality standards.
California Air Resources Board (CARB) Phase 2 certification ensures hardwood or laminate flooring,
such as our Columbia® hardwood, meets strict formaldehyde emissions standards.
North American Laminate Flooring Association (NALFA®) certification ensures laminate flooring
meets demanding performance standards.
Environmental Product Declaration (EPD) is a life cycle assessment-based tool to communicate the
environmental performance of a product, such as our Quick-Step® laminate.
Appalachian Hardwood Manufacturers, Inc. (AHMI) has verified data from the U.S. Forest Service
that Appalachian Hardwood Territory timber is harvested sustainably. We use AHMI timber in our
Columbia® hardwood flooring.
Program for Endorsement of Forest Certification (PEFC) certification ensures that select products
from our European sites are manufactured using timber from responsibly managed sources.
PRODUCT STEWARDSHIP
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42
Residential Carpet
Our sustainable carpets, cushion and cleaning products offer beautiful and healthy choices you can feel good about having in
your home.
SMARTSTRAND® FOREVER CLEANTM
We continue to expand our SmartStrand line
with the introduction of Forever Clean™ residential carpet with proprietary Nanoloc™ that
provides enhanced spill protection technology.
SmartStrand is made with DuPont™ Sorona®,
a renewably sourced polymer made with
37 percent corn sugar. SmartStrand fibers
require 30 percent less energy to manufacture
and reduce CO2 emissions by 63 percent,
as compared with nylon 6 fiber.
SMARTSTRAND® SILKTM
This soft product line is an extension of our
successful SmartStrand carpet. In addition to
renewably sourced fiber content, SmartStrand
Silk delivers unmatched softness, superior
performance, durability and built-in stain
protection for exceptionally long product life.
EVERSTRAND®
The EverStrand family of carpets is made from
up to 100 percent post-consumer recycled PET
plastic soda bottles using our BCF Continuum™
process. As a result, EverStrand carpets, which
have earned environmental claim validation
from Underwriters Laboratories, minimize
consumption of petrochemical resources and
help to reduce plastic in landfills.
KARASTAN® WOOL
SMARTCUSHIONTM
FLOORCARE ESSENTIALSTM
Sheep, which are shorn every nine to 12 months,
are the sustainable and renewable source for
Karastan wool carpets. In addition, all Karastan
wool is Clean Air Certified and has the ability to
remove contaminants from indoor air, making
homes healthier.
SmartCushion, made from recycled foam
trimmings, enhances both the feel and performance of our already exceptional carpet. It
contains 90 percent post-industrial material,
insulates to improve room energy efficiency
and is a CRI Green Label product for improved
air quality. With a portion of sales benefiting
breast cancer research through Susan G.
Komen for the Cure®, SmartCushion is now
smarter than ever.
Our non-toxic, soap-free, pet- and people-safe
carpet cleaners are made of all-natural ingredients and have earned recognition as a U.S.
Environmental Protection Agency “Design for
the Environment” product.
PRODUCT STEWARDSHIP
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Commercial Carpet
As one of the world’s largest suppliers of commercial carpet and carpet tile producers, Mohawk Group offers the styles, colors, sustainability
features and value points for a wide range of commercial products.
SMARTSTRAND® CONTRACT
NSF 140
ECOFLEX® NXT
This carpet is made with DuPont™ Sorona®,
a renewably sourced polymer that requires
30 percent less energy to manufacture and
reduces CO2 emissions by 63 percent, as compared with nylon 6 fiber. In addition, it is made
with 37 percent renewable ingredients, provides superior stain resistance, a luxurious
feel and unmatched design flexibility.
NSF 140 is the most widely respected multiattribute standard for carpet sustainability. We
are proud to offer a broad array of Silver, Gold
and Platinum NSF 140-certified products. We
use a life-cycle assessment, verified by a third
party, to measure and ensure alignment with
NSF 140 standards in categories such as recycled content and energy consumption.
A model of sustainable design, EcoFlex NXT is a
PVC-free backing that is up to 40 percent lighter
than similar PVC products, making it easier to
install and less expensive to ship. It also incorporates a minimum of 35 percent pre-consumer
recycled content and is certified at the Gold
level under the NSF 140 standards.
COLORSTRAND®
UNIBOND FLEXTM
DURACOLOR®
This 100 percent solution-dyed nylon fiber
boasts third-party-certified, 25 percent preconsumer recycled content that meets USGBC
LEED criteria, and products tufted with
Colorstrand are CRI Green Label Plus® certified for VOC emissions. With the quality to
perform in most commercial spaces, Colorstrand
delivers both lasting beauty and value.
This patented construction tufts carpet fiber
through primary and secondary backings,
while at the same time creating a single layer
with superior durability. Certified at the NSF
140 Platinum level, these carpets contain up to
16 percent post-consumer recycled content,
based on total product weight, and are CRI
Green Label Plus certified.
Duracolor fiber is made using a technology
developed by Mohawk. This process makes
already durable nylon also resistant to acidbased stains, which represent the vast majority
of stains impacting the marketplace. Stains
are removed with just water, thus reducing
cost, eliminating chemicals and making a
smaller environmental impact.
PRODUCT STEWARDSHIP
|
44
Tile
We offer a vast array of tile colors, textures and patterns with a variety of sustainable attributes for indoor and outdoor residential or
commercial products.
RECYCLED CONTENT
INDOOR AIR QUALITY
DIGITAL PRINTING
The kiln-firing process used to make tile results
in products that are 100 percent VOC-free.
Ceramic tile products meet the definition for
“inherently non-emitting material.” As a result,
they can contribute to a building program’s
efforts to achieve certification under LEED,
CHPS and other green building rating systems
without the need for VOC emission testing.
Digital imaging technology allows designers to
create visuals that even industry professionals
cannot discern from natural products like stone,
wood, fabric, concrete and metal. By effectively
incorporating digital print technology into the
product concept phase, we incur less waste in
the design and manufacturing process since
trial and error on actual tile in prototype testing
and approval phases is significantly reduced.
In addition, manufacturing flexibility is greatly
enhanced as production lines can easily be
modified by simply selecting a new digital file.
ENVIRONMENTAL PRODUCT
DECLARATIONS
HEALTH PRODUCT
DECLARATIONS
REGIONAL MATERIALS
Dal-Tile was the first manufacturer in the
ceramic tile industry to voluntarily disclose
cradle-to-grave impacts on all products
manufactured in North America through
UL Environment certified Environmental
Product Declarations (EPDs). EPDs are based
on rigorous product life cycle assessments
that focus on the environmental impact in
various categories, such as global warming
potential and depletion of abiotic resources.
All Dal-Tile tile bodies and glazes include
Health Product Declarations (HPDs) that
provide information on product contents and
health impacts. The HPDs for our ceramic
and porcelain tile document that no adverse
health impacts and no warnings or hazards are
associated with any of our finished products.
In our ceramic and porcelain tile business,
100 percent of our manufactured products
contain recycled and/or reclaimed material to
minimize consumption of virgin materials.
As the world’s largest producer of ceramic tile
products, Dal-Tile has more manufacturing
locations than any other ceramic company.
In North America alone, we make products in
eight (8) different states and Northern Mexico.
This means that many users of our products
have an opportunity to take advantage of
regional material credits available in many
green building programs.
PRODUCT STEWARDSHIP
|
45
Laminate
Laminate flooring, combined with our patented Uniclic® installation system, is unmatched for beauty, durability and sustainability.
RECYCLED CONTENT
INDOOR AIR QUALITY
PEFC-CERTIFIED LAMINATE
Our nature-inspired laminates mimic the look of
fine hardwood, natural stone or ceramic tile in
an eco-friendly flooring created with as much as
74 percent pre-consumer recycled content.
FloorScore certifies that laminate flooring,
such as our U.S.-manufactured Mohawk® and
Quick-Step® brands, meets strict indoor air
quality standards.
Program for Endorsement of Forest
Certification (PEFC) ensures that our select
products are manufactured using timber
from responsibly managed sources.
UNICLIC® INSTALLATION SYSTEM
This patented technology uses a glue-less
and chemical-free system for fast, easy
installation with no adverse impact on
indoor air quality.
LAMINATE CLEANERS
Formulated from all-natural ingredients,
our cleaners are sustainable, biodegradable
and have earned recognition as a U.S.
Environmental Protection Agency “Design
for the Environment” product.
DIDITTM CLICK FURNITURE COLLECTION
This line of assemble-yourself chipboard
furniture uses Uniclic® technology, which
means no bolts, screws, nails or other
fittings are used in its assembly, thereby
saving resources.
PRODUCT STEWARDSHIP
|
46
Wood
Our domestic and international hardwood flooring products are both stylish and environmentally sound, with sustainable options to
complement any décor.
INDOOR AIR QUALITY
Our engineered wood products manufactured
in the U.S. use PureBond* technology that eliminates formaldehyde adhesives, a source of
VOC emissions that can adversely impact
indoor air quality. They also are FloorScore®
certified, which means they meet strict
indoor air-quality standards.
HARDWOOD FLOOR CLEANERS
Made from all-natural, biodegradable ingredients, our hardwood floor-care products help to
sustain the long life of hardwood flooring.
RECLAIMED WOOD
Our Reclaimed Hardwood Flooring from
dismantled buildings keeps wood out of
landfills and brings it into today’s homes
to provide antique natural beauty.
FOREST STEWARDSHIP
COUNCIL® CERTIFIED
Engineered wood products manufactured in
our Malaysian wood facility are certified to
Forest Stewardship Council standards, which
means they are manufactured using timber
from responsibly managed sources.
*PureBond® is a registered trademark of Columbia Forest Products, Inc., in the U.S. and other countries and is used under license.
UNICLIC® INSTALLATION SYSTEM
This patented technology uses a glue-less
and chemical-free system for fast, easy
installation with no adverse impact on
indoor air quality.
PRODUCT STEWARDSHIP
|
47
Rugs & Mats
Mohawk Home is the largest supplier of rugs and mats in the United States, with products ranging from luxurious renewable Karastan®
rugs to practical mats made from recycled rubber.
EVERSTRAND® CONTINUUMTM
SMARTSTRAND® SILKTM
WOOL
EverStrand is made from up to 100 percent
post-consumer recycled PET plastic soda bottles using our BCF Continuum™ process. As a
result, EverStrand carpets and rugs, which have
earned environmental claim validation by
Underwriters Laboratories, minimize consumption of petrochemical resources.
SmartStrand Silk woven products are revolutionary in the area rug industry. Encompassing all
the benefits of our SmartStrand triexta fiber
system, for rugs we created a line of higher-end,
space-dyed woven products in a new on-trend
color palette.
Many of our rugs are made from highly sustainable resources such as renewable sheep-shorn
wool, found in our Karastan® rugs.
INFINITY SERIES RECYCLED
RUBBER MATS
ENVIROVINYL WALK-OFF MATS
GRAND TERRACE MATS
We have introduced two-color flock into our
classic 100 percent recycled rubber base. The
result is a mat that conserves natural resources
and is more fashionable than ever.
We have improved the traditional PVC vinyl
backing previously used in our walk-off mats
by removing phthalates and adding up to
50 percent recycled post-industrial materials.
A synthetic alternative to coir mats, this collection
of mats boasts 100 percent recycled rubber
backing laminated to a needle-punch polypropylene face to provide great product weight,
value and performance.
48
MOHAWK
Goals & Progress
GOALS & PROGRESS
|
49
Goals
For the past five years, Mohawk Industries has been working toward meaningful and measurable reductions in our energy, emissions, water and waste
footprint, guided by a set of 2020 goals that we have reported against annually. During this time, we have made significant progress. Through 2014 and
working from a 2010 baseline, we have reduced:
ENERGY
INTENSITY
11.4%
GHG
INTENSITY
9.39%
WATER
INTENSITY
15.96%
WASTE TO
LANDFILL
INTENSITY
13.31%
Our progress in environmental stewardship has been accompanied by significant business growth as well. Since 2010, revenue has increased from
$5.3 billion to $7.8 billion as we have grown legacy businesses and made significant acquisitions. This growth has dramatically increased our manufacturing
presence in Europe and Asia as well as in North America. The result is that Mohawk Industries today is a very different organization than when we
began formalizing our sustainability practice and setting goals in 2009.
During the past 12 months, we have analyzed data streams from our facilities as we have onboarded and integrated new businesses. We also have begun
the process of conducting a midterm assessment of our existing 2020 goals to determine how well they are aligned with our business today. This process
will continue into 2015 as we integrate additional acquisitions completed earlier in the year.
GOALS & PROGRESS
GOAL:
|
Energy & Emissions
25%
by 2020
Optimizing our overall energy consumption while also seeking
alternative economical, cleaner-burning fuels is the best way for
Mohawk to increase our bottom line and decrease our carbon footprint at the same time. As a vertically integrated manufacturer, we
have ample opportunities to do both.
Our strategy primarily targets improving in the energy efficiencies
of manufacturing and distribution processes via proven technologies and innovative solutions that transform energy use in our operations. In the process, we also are able to reduce our energy intensity,
which decreased 4.3 percent during 2014. This marks the fifth consecutive year that we have been able to realize positive progress on
energy intensity and the first in which we have seen an absolute
reduction in overall energy use. In 2014, we reduced our overall
consumption by more than 121,000 mWh while growing our business. Cumulatively, we have reduced energy intensity by 11.4 percent since 2010, our baseline year. Similar progress has been made
on reductions in greenhouse gas emissions intensity. This metric
decreased by 2 percent in 2014 as compared to 2013, and has
decreased 9.4 percent in total since the 2010 baseline year.
Much of our focus during 2014 was on the continued integration
of newly acquired operations and the identification of opportunities
to share best practices and processes among our new and existing businesses. Within Marazzi, which we acquired in 2013, three
ceramic plants in Europe produce their own electricity via co-generation
from natural gas-powered turbines. In 2014, these plants produced
65,345,984 kilowatt hours of electricity — enough to power 6,030
average U.S. homes for a year. The performance of these plants
helped to inform our decision to invest further in electric co-generation
during 2015, when operations will start up at plants in Mexico
and Russia.
50
Capital investments in 2014 included energy-efficient lighting
retrofits at seven U.S. manufacturing facilities across our business
units. In total, these retrofits will reduce annual energy use by
more than 14 million kilowatt hours and reduce equivalent CO2
emissions by 9,600 metric tonnes, the equivalent of taking more
than 2,000 cars off the road annually.
One of these lighting retrofits was at our commercial carpet tile manufacturing plant in Glasgow, Virginia. This is the latest in a series of
energy-efficiency investments at this site, which provides an excellent example of how enhancements add up incrementally over
time. During this time, we have replaced a coal-fired boiler with
more modern gas and oil boilers and an electric latex oven with a
natural gas oven.
The net effect has been a nearly 20 percent reduction in energy consumption between 2010 and 2014. The enhanced manufacturing
plant positions Glasgow well to meet growing carpet tile demand in
the future with a cleaner and reduced environmental footprint.
Equipment enhancements also are positioning one of our wood
sites in Melbourne, Arkansas, to realize measurable energy reductions. The facility installed a new air compressor and air dryer at the
end of 2014, and the main boiler induced draft fan was replaced with
a variable frequency drive fan, which will increase production,
improve operating efficiency and lower maintenance. Combined,
the improved efficiency of these modifications alone is projected to
yield an annual savings of more than 1 million kWh and close to
$100,000 annually.
Within the Ceramic business, energy efficiencies are realized
annually through a competition among its plants to reduce natural gas usage through employee engagement. The winner brings
“home” the Golden Gas trophy for a year. In 2014, this home was
Monterrey, Mexico, where the Large Unit Wall (LUW) plant
decreased its 2014 natural gas consumption by 13 percent over
2013. Other plants that realized a notable decrease in natural gas
consumption for 2014 include mosaic tile plants in Gettysburg,
Pennsylvania, and a second plant in Monterrey, Mexico. These and
other efforts resulted in Ceramic consuming under 9,000 BTUs for
2014 — a record low level — as the business works to reduce its
overall utility usage by 25 percent.
51
GOALS & PROGRESS
| Energy & Emissions
Energy Intensity
GHG Intensity
(in MWh/net sales)
(in metric tonnes/net sales)
1.5
0.5
1.237 1.197
1.3
1.181
1.146
1.1
0.4
1.096
0.927
0.2
0.7
0.1
2010
2011
2012
2013
2014
2020
0.315
0.309
0.303
0.3
0.9
0.5
0.327
0.0
2014 Energy Consumption By Source*
(in gigajoules)
2010
2011
2012
2013
0.296
2014
2014 Energy Savings
(in gigajoules)
20,810,015
932,619
Natural Gas
Productivity Improvements/
Manufacturing Capacity
Rationalization
Electricity
405,487
8,670,744
994,182
Energy CapEx Investments
Diesel
13,516
180,342
Low-/No-Cost Energy
Improvements
Propane
155,540
Coal
143,876
Light Oil
507
Heavy Oil
2014 Total GHG Emissions**
(in metric tonnes)
1,181,622
Total Direct GHG Emissions
1,143,504
Total Indirect GHG Emissions
*In addition to direct and indirect energy consumption, we also measured 2.645 million gigajoules related to biomass.
**In addition to direct and indirect GHG emissions, we also measured 394,268 metric tonnes of GHG emissions related to biomass sources. Product and refrigerant emissions are excluded from our metrics.
0.245
2020
GOALS & PROGRESS
GOAL:
|
52
Water
25%
Water Intensity
(in mga/net sales)
by 2020
Water management and conservation are essential actions for us,
given the increasing scarcity of this natural resource and the water
required in the manufacture of carpet, rugs and tile.
During 2014, water intensity increased 3.39 percent over 2013. This
increase stems from greater water demand in our Ceramic and
Carpet operations, which comprise approximately 80 percent of
our sales. In particular, Ceramic, which involves water-intensive
manufacturing processes, continues to grow as a percentage of our
product mix. Even though we experienced a slight increase in 2014,
we are pleased with overall progress toward our 2020 goal of a
25 percent decrease in water intensity. Through 2014, we have
realized a cumulative 15.96 percent reduction against a 2010
baseline, putting us well over the halfway mark to our 2020 goal.
We are also encouraged by a marked increase in the amount of
water recycled by our Ceramic operations. In 2014, 824,814 cubic
meters, or nearly 218 million gallons, of water were recovered and
reused. This is a 34 percent increase over 2013. Ceramic recovered
nearly 33 percent of its total water needs in 2014, moving the total
for the Company to 6.42 percent.
0.60
0.515
0.497
0.48
0.453
0.419
0.433
2013
2014
0.36
0.24
0.12
0.00
2010
2011
2012
2014 Water Withdrawal by Source
(in million cubic meters per year)
8.69
Municipal Water Supplies
2.16
Groundwater
1.78
Surface Water
0.23
Industrial
0.386
2020
GOALS & PROGRESS
GOAL:
|
53
Waste
25%
A Remarkable Recycling Effort
by 2020
5,614,406,000 Pounds
At Mohawk, we look at waste as both a challenge and an opportunity.
We are challenged to find ever more ways to reduce waste, while at the
same time recognizing the opportunity to transform waste into something of value. Our capabilities for such are well developed, but more
opportunities remain.
We recycle our waste from operations as well as purchase recycled material for
use in our products. Our result of these recycling activities is nearly 17 times the
amount of waste we landfill each year.
During 2014, waste to landfill intensity decreased 5.21 percent from 2013.
Since 2010, our baseline year, we have realized a 13.31 percent reduction
through 2014. This progress means that we are more than halfway to our
2020 goal of reducing waste to landfill intensity by 25 percent.
Waste to Landﬁll Intensity
Our Zero Landfill program is proving to be the key driver of this
progress. Already, we have seen 25 manufacturing facilities eliminate or up-cycle the entire manufacturing waste stream. The effort
is helping us build a waste-responsible culture on a facility-by-facility basis, while also being flexible to the process waste needs and
challenges of those locations. Having initially rolled out the program
in our carpet facilities, we began to expand the program across the
enterprise in late 2014 with sites in both our Laminate and Ceramic
businesses seeking certification in early 2015.
Through a strategic benchmarking, evaluation and goal-setting process,
our Zero Landfill program helps individual sites determine an attainable
set of site-specific manufacturing waste reduction targets. Each facility
then kicks off a 40-day, on-site campaign to inform, educate and influence employee behavior. This campaign includes the introduction of best
practices into facility operations, as well as a communication campaign
to enlighten and engage facility employees on waste reduction issues.
Employee awareness and engagement, in particular, are key to
continuing our progress in waste reduction. By examining every
phase of manufacturing, our employees uncover new opportunities on
a seemingly constant basis. Employees at our facilities at Sunnyvale
and El Paso, Texas, as well as Muskogee, Oklahoma, for instance,
re-examined the way loaders shrink-wrap pallets for shipping.
Automating that process and integrating scanning and labeling
reduced average process time by 80 percent, with considerable
savings of shrink film.
Another employee-led process improvement reduced waste by resolving a “sticky tile” problem at Dal-Tile’s El Paso, Texas, plant. Nearly every
time 3x6 tile was run at the plant, team members discovered many tiles
sticking together on the sides after being glazed on the line. Using
Kaizen tools and analysis, a team was able to identify four root causes
for the problem and came up with practical solutions for each of them.
After testing and implementing the changes, there was a 70 percent
decrease in the frequency of tiles sticking together, resulting in a reduction in scrap waste, as well as higher productivity, less equipment
downtime, improved safety and higher customer satisfaction.
(in tons/net sales)
0.025
0.0247
0.0233
0.023
0.0225 0.0226
0.0214
0.021
0.019
0.0185
0.017
0.015
2010
2011
2012
2013
2014
2020
2014 Total Waste by Type
Non-Hazardous Wastes*
Hazardous Wastes**
Total
Tons
Tonnes
871,909
791,209
3,774
3,422
875,683
794,631
2014 Total Waste by Disposal Method
Tons
Tonnes
676,959
613,743
30,816
27,939
Biomass Used Internally as Fuel
274,277
248,664
Landfill
167,908
152,229
1,149,960
1,042,575
Recycling
Incinerated Externally
Total
*Non-hazardous wastes disposed of directly by the reporting organization or directly confirmed.
**Information on disposal of hazardous wastes provided by the waste contractor.
GOALS & PROGRESS
|
FIRA Assurance Statement
54
For the full statement, including scope, our methodology, work undertaken, disclaimers and description of accomplishments and opportunities
for improvement, please see http://www.fira.nl/files/mohawksustainability/MHKstatement2014report.pdf.
Mohawk Industries has commissioned FIRA to provide external assurance on its 2014 web-based and pdf Sustainability Report
(further referred to as ‘The Report’).
Conclusion
Based on the undertaken work, we conclude that the claims and information portrayed in The Report are reliable. We commend Mohawk on
a thorough approach leading to GRI B+. We encourage Mohawk to further prepare for reporting based on GRI G4.
Accomplishments and Recommendations
We have seen significant progress in many areas. For 2014, Mohawk increased the data collection from its new acquisitions and continues
to show progress towards its 2020 goals. As Mohawk is growing in other geographies, corporate is responding to the need of group
management. CSR policies on social issues are maturing and management approaches are disclosed.
• Strategic Initiatives & Sustainability Strategy: Progress on strategic planning has been limited. A more defined structure for CSR strategic
thinking and a process of quantifying CSR benefits will benefit the organization. We encourage Mohawk to create an overarching framework
that could link the business units under a comprehensive corporate strategy to accelerate their effectiveness through the creation of
common synergies.
• Management Approach: Mohawk is disclosing a clear sense of direction on material issues. We recommend further refining the
approach by disclosing the comparison between Mohawk current state against the policies and targets that Mohawk want to achieve
3-5 years from now.
• Stakeholders Engagement: Stakeholder engagement is strongly business focused. We recommend accelerating CSR based stakeholder
engagement by isolating specific CSR stakeholder needs and seeking collaboration to strengthen the business.
• Accountability: The roles and responsibilities of the people engaged in the different sustainability activities are scattered. Therefore, the
accountability for programs, metrics, initiatives, and resources is often difficult to track, and requires time and effort to coordinate. A clear
accountability map for the sustainability initiatives could increase efficiency during the implementation and monitoring of activities.
• KPI Management & Data Reliability: As data collection is maturing, and new acquisitions join the company, Mohawk is challenged to
continue the journey from data collection to metrics management. We recommend formalizing KPI management by establishing protocols,
goals and accountability for management on the evaluation of sustainability performance; this is increasingly important considering the
international growth of the company. In 2014, Mohawk continued extending its data collection process to include acquisitions’ data and
has verified and corrected historical data.
• Risk Management: Mohawk will benefit by further standardizing the ERM system adding, a risk library and integrate the CSR risk management
process with the business process.
• CSR Supplier Management: Mohawk keeps expanding the implementation of their supplier code of conduct into more divisions. This process
could be expedited with a more structured rollout companywide, and close monitoring of the global implementation.
For FIRA,
A.C. de Bruijn
Director FIRA
July 20th, 2015, The Netherlands
GOALS & PROGRESS
|
GRI Content Index
55
Legend: NA — Not Applicable, NR — Not Reporting, P — Partial, 10-K — Form 10-K, AR — Annual Report, FC — Front Cover, IFC — Inside Front Cover, BC — Back Cover, IBC — Inside Back Cover
STANDARD DISCLOSURES PART I: Profile Disclosures
Profile
Disclosure
Description
1. Strategy and Analysis
1.1
Statement from the most senior decision-maker of the organization.
1.2
Description of key impacts, risks, and opportunities.
2. Organizational Profile
2.1
Name of the organization.
2.2
Primary brands, products, and/or services.
2.3
Operational structure of the organization, including main divisions, operating companies, subsidiaries,
and joint ventures.
2.4
Location of organization's headquarters.
2.5
Number of countries where the organization operates, and names of countries with either major
operations or that are specifically relevant to the sustainability issues covered in the report.
2.6
Nature of ownership and legal form.
2.7
Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).
2.8
Scale of the reporting organization.
2.9
Significant changes during the reporting period regarding size, structure, or ownership.
2.10
Awards received in the reporting period.
3. Report Parameters
3.1
Reporting period (e.g., fiscal/calendar year) for information provided.
3.2
Date of most recent previous report (if any).
3.3
Reporting cycle (annual, biennial, etc.)
3.4
Contact point for questions regarding the report or its contents.
3.5
Process for defining report content.
3.6
Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers).
See GRI Boundary Protocol for further guidance.
3.7
State any specific limitations on the scope or boundary of the report (see completeness principle for
explanation of scope).
3.8
Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities
that can significantly affect comparability from period to period and/or between organizations.
3.9
Data measurement techniques and the bases of calculations, including assumptions and techniques underlying
estimations applied to the compilation of the Indicators and other information in the report. Explain any
decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols.
3.10
Explanation of the effect of any re-statements of information provided in earlier reports, and the
reasons for such re-statement (e.g.,mergers/acquisitions, change of base years/periods, nature of business,
measurement methods).
3.11
Significant changes from previous reporting periods in the scope, boundary, or measurement methods
applied in the report.
3.12
Table identifying the location of the Standard Disclosures in the report.
3.13
Policy and current practice with regard to seeking external assurance for the report.
Reported
2-3
2-3, 12-13,
10-K (6-10)
FC, BC
5, 10-K (2-5)
5, 10-K (2-5)
5
6, 13, 10-K (2)
9, 10-K (FC)
5, 6, 13, 10-K (2)
5-7, 13
1, 10-K (37-39)
17
1
1
1
IBC
1
1
1
1
1, 12
49,54
49,54
1,
49-54
55
1
56
GOALS & PROGRESS
| GRI Content Index
STANDARD DISCLOSURES PART I: Profile Disclosures
Profile
Disclosure
Description
4. Governance, Commitments, and Engagement
4.1
Governance structure of the organization, including committees under the highest governance
body responsible for specific tasks, such as setting strategy or organizational oversight.
4.2
Indicate whether the Chair of the highest governance body is also an executive officer.
4.3
For organizations that have a unitary board structure, state the number of members of the highest
governance body that are independent and/or non-executive members.
4.4
Mechanisms for shareholders and employees to provide recommendations or direction to the
highest governance body.
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
Linkage between compensation for members of the highest governance body, senior managers, and
executives (including departure arrangements), and the organization's performance (including social
and environmental performance).
Processes in place for the highest governance body to ensure conflicts of interest are avoided.
Process for determining the composition, qualifications, and expertise of the members of the
highest governance body and its committees, including any consideration of gender and other
indicators of diversity.
Internally developed statements of mission or values, codes of conduct, and principles relevant
to economic, environmental, and social performance and the status of their implementation.
Procedures of the highest governance body for overseeing the organization's identification and
management of economic, environmental, and social performance, including relevant risks and
opportunities, and adherence or compliance with internationally agreed standards, codes of
conduct, and principles.
Processes for evaluating the highest governance body's own performance, particularly with respect to
economic, environmental, and social performance.
Explanation of whether and how the precautionary approach or principle is addressed by the
organization.
Externally developed economic, environmental, and social charters, principles, or other initiatives to which
the organization subscribes or endorses.
Memberships in associations (such as industry associations) and/or national/international advocacy
organizations in which the organization: * Has positions in governance bodies; * Participates in
projects or committees; *Provides substantive funding beyond routine membership dues; or
* Views membership as strategic.
List of stakeholder groups engaged by the organization.
Basis for identification and selection of stakeholders with whom to engage.
Approaches to stakeholder engagement, including frequency of engagement by type and by
stakeholder group.
Key topics and concerns that have been raised through stakeholder engagement, and how the
organization has responded to those key topics and concerns, including through its reporting.
Reported
9, Corporate
Website
8
8
Proxy (3-6)
Corporate
Website,
Proxy (35-36)
9, 14
Proxy (14)
9, Corporate
Website
Proxy (34)
9, 10, 13
Corporate
Website
9, 13
Corporate
Website
9
9
1, 26
21
16
16
16
16
57
GOALS & PROGRESS
| GRI Content Index
STANDARD DISCLOSURES PART II: Performance Indicators
Performance
Indicator
Description
Economic
DMA EC
Disclosure on Management Approach EC
Economic performance
EC1
Direct economic value generated and distributed, including revenues, operating costs, employee
compensation, donations and other community investments, retained earnings, and payments to
capital providers and governments.
EC2
Financial implications and other risks and opportunities for the organization's activities due to
climate change.
EC3
Coverage of the organization's defined benefit plan obligations.
EC4
Significant financial assistance received from government.
Market presence
EC5
Range of ratios of standard entry level wage by gender compared to local minimum wage at significant
locations of operation.
EC6
Policy, practices, and proportion of spending on locally-based suppliers at significant locations
of operation.
EC7
Procedures for local hiring and proportion of senior management hired from the local community at
locations of significant operation.
Indirect economic impacts
EC8
Development and impact of infrastructure investments and services provided primarily for public
benefit through commercial, in-kind, or pro bono engagement.
EC9
Understanding and describing significant indirect economic impacts, including the extent of impacts.
Reported
2-3, 19-20
AR (1-4)
5,
10-K (13-15)
10-K (9)
10-K (44-45)
9
NR
NR
NR
29-32
2-3, 20-P
58
GOALS & PROGRESS
| GRI Content Index
Performance
Indicator
Description
Environmental
DMA EN
Disclosure on Management Approach EN
Materials
EN1
EN2
Energy
EN3
EN4
EN5
EN6
EN7
Water
EN8
EN9
EN10
Biodiversity
EN11
Materials used by weight or volume.
Percentage of materials used that are recycled input materials.
Reported
2-3, 12-13, 14, 34-36,
49-53, Corporate
Website
NR
34-36, 42-45, 47-P
Direct energy consumption by primary energy source.
Indirect energy consumption by primary source.
Energy saved due to conservation and efficiency improvements.
Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in
energy requirements as a result of these initiatives.
Initiatives to reduce indirect energy consumption and reductions achieved.
51
51
51
35, 42
Total water withdrawal by source.
Water sources significantly affected by withdrawal of water.
Percentage and total volume of water recycled and reused.
52
52-P
15, 52
Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high
biodiversity value outside protected areas.
EN12
Description of significant impacts of activities, products, and services on biodiversity in protected areas and
areas of high biodiversity value outside protected areas.
EN13
Habitats protected or restored.
EN14
Strategies, current actions, and future plans for managing impacts on biodiversity.
EN15
Number of IUCN Red List species and national conservation list species with habitats in areas affected by
operations, by level of extinction risk.
Emissions, effluents, and waste
EN16
Total direct and indirect greenhouse gas emissions by weight.
EN17
Other relevant indirect greenhouse gas emissions by weight.
EN18
Initiatives to reduce greenhouse gas emissions and reductions achieved.
EN19
Emissions of ozone-depleting substances by weight.
EN20
NOx, SOx, and other significant air emissions by type and weight.
EN21
Total water discharge by quality and destination.
EN22
Total weight of waste by type and disposal method.
EN23
Total number and volume of significant spills.
EN24
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the
Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.
NR
NR
NR
NR
NR
NR
51-P
NR
49-51
NR
NR
NR
53
NR
NR
59
GOALS & PROGRESS
| GRI Content Index
Performance
Indicator
Description
Environmental
EN25
Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected
by the reporting organization's discharges of water and runoff.
Products and services
EN26
Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.
EN27
Percentage of products sold and their packaging materials that are reclaimed by category.
Compliance
EN28
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with
environmental laws and regulations.
Transport
EN29
Significant environmental impacts of transporting products and other goods and materials used for the
organization's operations, and transporting members of the workforce.
Overall
EN30
Total environmental protection expenditures and investments by type.
Social: Labor Practices and Decent Work
DMA LA
Disclosure on Management Approach LA
Employment
LA1
Total workforce by employment type, employment contract, and region, broken down by gender.
LA2
Total number and rate of new employee hires and employee turnover by age group, gender, and region.
LA3
Benefits provided to full-time employees that are not provided to temporary or part-time employees,
by significant locations of operation.
LA15
Return to work and retention rates after parental leave, by gender.
Labor/management relations
LA4
LA5
Percentage of employees covered by collective bargaining agreements.
Minimum notice period(s) regarding significant operational changes, including whether it is specified in
collective agreements.
Occupational health and safety
LA6
Percentage of total workforce represented in formal joint management-worker health and safety
committees that help monitor and advise on occupational health and safety programs.
LA7
Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
by region and by gender.
LA8
Education, training, counseling, prevention, and risk-control programs in place to assist workforce
members, their families, or community members regarding serious diseases.
LA9
Health and safety topics covered in formal agreements with trade unions.
Training and education
LA10
Average hours of training per year per employee by gender, and by employee category.
LA11
Programs for skills management and lifelong learning that support the continued employability of
employees and assist them in managing career endings.
LA12
Percentage of employees receiving regular performance and career development reviews, by gender.
Reported
NR
34-47-P
NR
NR
NR
NR
9, 12-13, 19-28
19-20
20
28
NR
27
27-P
21
21-P
28
NR
24-P
23-26-P
24-P
60
GOALS & PROGRESS
| GRI Content Index
Performance
Indicator
Description
Social: Labor Practices and Decent Work
Diversity and equal opportunity
LA13
Composition of governance bodies and breakdown of employees per employee category according to
gender, age group, minority group membership, and other indicators of diversity.
Equal remuneration for women and men
LA14
Ratio of basic salary and remuneration of women to men by employee category, by significant locations of
operation.
Social: Human Rights
DMA HR
Disclosure on Management Approach HR
Investment and procurement practices
HR1
Percentage and total number of significant investment agreements and contracts that include
clauses incorporating human rights concerns, or that have undergone human rights screening.
HR2
Percentage of significant suppliers, contractors and other business partners that have undergone
human rights screening, and actions taken.
HR3
Total hours of employee training on policies and procedures concerning aspects of human rights
that are relevant to operations, including the percentage of employees trained.
Non-discrimination
HR4
Total number of incidents of discrimination and corrective actions taken.
Freedom of association and collective bargaining
HR5
Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights.
Child labor
HR6
Operations and significant suppliers identified as having significant risk for incidents of child labor, and
measures taken to contribute to the effective abolition of child labor.
Forced and compulsory labor
HR7
Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor,
and measures to contribute to the elimination of all forms of forced or compulsory labor.
Security practices
HR8
Percentage of security personnel trained in the organization's policies or procedures concerning
aspects of human rights that are relevant to operations.
Indigenous rights
HR9
Total number of incidents of violations involving rights of indigenous people and actions taken.
Assessment
HR10
Percentage and total number of operations that have been subject to human rights reviews and/or
impact assessments.
Remediation
HR11
Number of grievances related to human rights filed, addressed and resolved through formal
grievance mechanisms.
Reported
9, 19-20
NR
9, 10, 12-13, 19-20,
27
NR
9, 10-P
NR
NR
NR
9, 10, 27
27
NR
27
NR
NR
61
GOALS & PROGRESS
| GRI Content Index
Performance
Indicator
Description
Social: Society
DMA SO
Disclosure on Management Approach SO
Local Community
SO1
Percentage of operations with implemented local community engagement, impact assessments,
and development programs.
SO9
Operations with significant potential or actual negative impacts on local communities.
SO10
Prevention and mitigation measures implemented in operations with significant potential or actual
negative impacts on local communities.
Corruption
SO2
Percentage and total number of business units analyzed for risks related to corruption.
SO3
Percentage of employees trained in organization's anti-corruption policies and procedures.
SO4
Actions taken in response to incidents of corruption.
Public policy
SO5
Public policy positions and participation in public policy development and lobbying.
SO6
Total value of financial and in-kind contributions to political parties, politicians, and related institutions
by country.
Anti-competitive behavior
SO7
Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and
their outcomes.
Compliance
SO8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws
and regulations.
Reported
9, 12-13,
29-32-P
29-32-P
NR
NR
9
9
NR
9
9
10-K (47-48)
10-K (47-48)
62
GOALS & PROGRESS
| GRI Content Index
Performance
Indicator
Description
Social: Product Responsibility
DMA PR
Disclosure on Management Approach PR
Customer health and safety
PR1
Life cycle stages in which health and safety impacts of products and services are assessed for improvement,
and percentage of significant products and services categories subject to such procedures.
PR2
Total number of incidents of non-compliance with regulations and voluntary codes concerning health and
safety impacts of products and services during their life cycle, by type of outcomes.
Product and service labeling
PR3
Type of product and service information required by procedures, and percentage of significant products and
services subject to such information requirements.
PR4
Total number of incidents of non-compliance with regulations and voluntary codes concerning product and
service information and labeling, by type of outcomes.
PR5
Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.
Marketing communications
PR6
Programs for adherence to laws, standards, and voluntary codes related to marketing communications,
including advertising, promotion, and sponsorship.
PR7
Total number of incidents of non-compliance with regulations and voluntary codes concerning
marketing communications, including advertising, promotion, and sponsorship by type of outcomes.
Customer privacy
PR8
Total number of substantiated complaints regarding breaches of customer privacy and losses of
customer data.
Compliance
PR9
Monetary value of significant fines for non-compliance with laws and regulations concerning the provision
and use of products and services.
Reported
2-3, 12-13, 15, 34-36
NR
NR
34-37
NR
15, 16, 34-36-P
34-36-P
NR
NR
NR
Contact Information
Mohawk Industries, Inc.
160 South Industrial Boulevard
Calhoun, Georgia 30701
www.mohawkind.com
Mohawk Sustainability
[email protected]
Media Inquiries
[email protected]
‘USGBC®’, ‘LEED®’ and related logos are trademarks owned by the U.S. Green Building Council® and are used with permission.
In alignment with Mohawk’s commitment to sustainability, this report has been printed on paper that is manufactured with
30% post-consumer waste. These forests are certified to a responsibly managed forest management standard.
160 South Industrial Boulevard
Calhoun, Georgia 30701
www.mohawkind.com
www.mohawksustainability.com
© 2015 Mohawk Industries, Inc.

2014 Corporate Responsibility Report

Transcription

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